New Delhi [India], June 16 : Indian stock indices traded higher on Friday morning, getting support from the US central bank's latest monetary policy stance - which finally paused the interest rate after raising it for over a year.
Sensex and Nifty indices were 0.4 per cent higher each at the time of writing this report.
"There are two factors - one positive and the other negative- that are impacting the market trend now. The positive factor is the favourable global cues. The mother market the US has shrugged off the Fed's 'hawkish pause' and has moved forward," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The US Federal Reserve's monetary policy committee paused the key interest rate in its latest meeting on Wednesday. The policy rate has been maintained at 5.0-5.25 per cent, which was near zero after the outbreak of COVID-19.
Barring the latest pause, the US central bank has hiked the interest rate for the tenth consecutive time which was necessitated in the fight against soaring inflation.
Another significant factor that supports Indian stocks is that there are signals from the manufacturing sector showing a clear revival. Overall, the Indian market sentiment has been positive after inflation continued to moderate, with consistent purchases by foreign portfolio investors and a strong growth outlook.
"This is the beginning of a cycle that can last 4 to 5 years. Capital goods will be major beneficiaries of this capex cycle," add Vijayakumar.
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