Indian shares seen opening flat after Fed signals more hikes; NSE IPO in focus
Indian shares are set for a muted start on Thursday after the US Federal Reserve raised interest rates and signalled further hikes, while elevated crude prices and a busy primary market led by the National Stock Exchange of India’s IPO opening are expected to weigh on sentiment. GIFT Nifty futures were trading around 23,224.5 points, as of 7:58 a.m. IST, indicating a flat start for the Nifty 50…
Indian shares are poised for a subdued opening on Thursday after the US Federal Reserve raised interest rates and indicated additional hikes, amid elevated oil prices and a bustling primary market fueled by the National Stock Exchange of India's IPO debut. The Nifty 50 index futures were hovering around 23,224.5 points as of 7:58 a.m. IST, suggesting a flat start for the Nifty 50 index, which ended Wednesday at 23,217.60.
The Federal Reserve increased rates by 25 basis points in a unanimous vote, marking its first hike in over three years. Quarterly projections revealed that 16 out of 18 policymakers anticipated at least one more 25-basis-point rise by the end of the year. Higher US interest rates diminish the allure of emerging markets like India for global investors and could also exert downward pressure on sectors such as information technology, where companies rely heavily on US revenues.
Brent crude prices saw a slight dip to around $106 a barrel following reports of Saudi Arabia offering extra shipments via Oman, easing some supply concerns. However, ongoing restrictions in the Strait of Hormuz and persistent geopolitical uncertainties continue to cast a shadow over the oil market outlook. Investors will also monitor the NSE IPO, set to commence on Thursday and mark the fifth primary market offering this year.
The exchange allocated shares worth 67.46 billion rupees ($703.07 million) to anchor investors on Wednesday, including sovereign wealth funds from Norway and Abu Dhabi, at 1,785 rupees each, the top end of the price range. Arun Kejriwal, founder of Kejriwal Research and Investment Services, noted that with the IPO pipeline heavily saturated, a significant amount of liquidity is expected to be channelled into the primary market.
Consequently, investor focus is heavily on new issues, leaving the secondary cash market relatively underappreciated.
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