Hopes of interest rate cut buoy markets
MUMBAI, Jan 29: Hopes of an interest rate cut, coupled with a strengthening rupee and positive global cues, buoyed the Indian equity markets on Friday.
This led to a barometer index of the Indian equity markets to gain 401 points during the day’s trade.
Initially, both the Indian bellwether indices opened on a positive note, in sync with their Asian peers, firm crude oil prices and Bank of Japan’s (BoJ) decision to maintain its stimulus program.
Markets started their upward climb after initial consolidation from Thursday’s close — when both bellwether indices ended flat.
Further, markets showed a healthy interest in the February F&O (futures and options) series.
Trends in midcap segment showed an increase in participation on the back of liquidity injected by domestic institutiol investors (DIIs) and fall in foreign institutiol investors’ (FIIs) exposure.
In addition, short-covering and value buying at lower levels pushed up prices.
Investors were seen hopeful of an interest rate cut during the upcoming monetary policy review by the Reserve Bank of India (RBI) which is slated for February 2.
Expectations were backed up by Bank of Japan’s decision to go in for a negative interest rate to support the Japanese economy. The BoJ’s cut key lending rates by 20 basis points to negative 0.1 percent. BoJ’s decision comes a day after the US Fed maintained its status quo on key lending rates. (IANS)