Indian shares to hit record high if Fed cuts rates
Monday, 17 September 2007
MUMBAI, Sept 16 (AFP): Indian share prices could hit a record high this week if the US Federal Reserve opts to cut rates at its monetary policy meeting, dealers said Friday.
For the week to September 14, the Mumbai stock exchange's 30-share benchmark Sensex index rose marginally by 0.08 per cent or 13.38 points to 15,603.8.
Earlier this week the markets were rangebound, and lost most intraday gains Friday on global credit worries.
Analysts now expect the US Federal Reserve to cut rates by a quarter point from 5.25 per cent to ease credit concerns when it meets on Tuesday.
"The expected Fed rate cut is to be a sentiment-positive. We expect the market to consolidate over the short term," Bharat Iyer, head of India equity research at JP Morgan, said in a note to clients.
"While the expected 25 basis point Fed rate cut is likely to support equity market sentiment, the market will subsequently have to contend with the slowing earnings growth outlook," he said.
The release of India's second-quarter earnings data starts in early October.
Price data released Friday was well under the central bank's targets. Inflation slipped to 3.52 per cent for the week ended September 1, from 3.79 per cent for the previous week.
For the week to September 14, the Mumbai stock exchange's 30-share benchmark Sensex index rose marginally by 0.08 per cent or 13.38 points to 15,603.8.
Earlier this week the markets were rangebound, and lost most intraday gains Friday on global credit worries.
Analysts now expect the US Federal Reserve to cut rates by a quarter point from 5.25 per cent to ease credit concerns when it meets on Tuesday.
"The expected Fed rate cut is to be a sentiment-positive. We expect the market to consolidate over the short term," Bharat Iyer, head of India equity research at JP Morgan, said in a note to clients.
"While the expected 25 basis point Fed rate cut is likely to support equity market sentiment, the market will subsequently have to contend with the slowing earnings growth outlook," he said.
The release of India's second-quarter earnings data starts in early October.
Price data released Friday was well under the central bank's targets. Inflation slipped to 3.52 per cent for the week ended September 1, from 3.79 per cent for the previous week.