FOMC meeting today: Investors are awaiting the outcome of the Federal Open Market Committee (FOMC) meeting, which ends today, as the Indian stock market trades in a narrow range. According to market rumors, the US Fed chairman may decide to announce a 25 basis point maximum interest rate increase. Stock market observers claim that Dalal Street already undervalued the US Fed’s interest rate increase, thus it won’t have much of an influence on Indian indices. Nonetheless, he anticipated a very tumultuous session following the FOMC meeting and urged short-term investors to invest in premium pharmaceutical and fast-moving consumer goods (FMCG) firms that are now trading at favorable discounts. Experts advise long-term investors to purchase car, Technology, and banking companies at a discount.
US Fed rate hike is in focus
Ritika Chhabra, a quant macro strategist at Prabhudas Lilladher, said that the US Fed would increase interest rates following today’s FOMC meeting and added, “Despite concerns about the ongoing financial crisis, the Fed is expected to raise the FFR by 25 bps at the future FOMC meeting.” “The Bank will reaffirm its dedication to reestablishing price stability. It won’t alter its monetary policy but will use liquidity facilities to try to resolve worries about financial stability.”
“Lowering US inflation gives confidence that the Fed is not an option for a sudden rate hike of 50 bps,” said Arvinder Singh Nanda, Senior Vice President of Master Capital Services, in response to a US Fed official’s assertive attitude on interest rate increases. Will decide to take a break during the March meeting, and they might also think about it. The market is a-buzz with the US Fed officials’ aggressive approach at this meeting, and a rate increase of no more than 25 basis points is anticipated.
The US Federal Reserve will raise interest rates by 25 basis points following the FOMC meeting, according to global brokerage Nomura.
Strategy for Indian Investors
According to Ravi Singhal, CEO of GCL Broking, what Indian stock market investors should look out for in the US Fed’s announcement following the FOMC meeting “urges Indian and other developing market investors to pay attention to the US Fed’s statement regarding the US bank crisis. The IT industry in India and other developing nations would be impacted by this. So, I advise Indian and other Asian stock market investors to consider the US Fed’s stance on the current bank crisis rather than the US Fed interest rate. Check the remark about their travel itinerary. defeat this string of bank failures.”
If the US Fed decides to increase interest rates by 25 basis points, according to Ravi Singhal of GCL Broking, it won’t have much of an impact on Indian markets because they have already discounted themselves in the current selloff. But, according to Ravi Singhal, high-quality companies from the pharma and FMCG sectors would outperform them for short-term returns.
Stocks to buy before the FOMC meeting
Ravi Singhal added that strong pharmaceutical stocks like Aurobindo Pharma and Zydus Life can be purchased by short-term positional investors at attractive prices as a result of the recent violence on Dalal Street. He continued by saying that FMCG stocks like Marico, Dabur, and ITC can be a value pick for up to three months if one is interested in the industry.
Should buy the stock for the long term
Avinash Gorakshkar, head of research at Profitmart Securities, advised long-term investors to take advantage of the decline in IT, auto, and banking sectors as good buying opportunities if the US Federal Reserve decides to raise interest rates by 25 basis points or less. Positional investors could look into State Bank of India (SBI), Canara Bank, Axis Bank, and ICICI Bank in the banking sector as well as Mahindra & Mahindra (M&M) in the auto sector.
Regarding IT stocks in light of the anticipated 25 basis point increase in the US Federal Reserve rate, Ravi Singhal of GCL Broking stated, “If TCS becomes available approximately between the levels of 2900 and 3,000 in the near term, then this will be a great buying opportunity for long-term IT stock investors.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of O2help. We advise investors to do due diligence with certified experts before making any investment decision.
