‘Slow & steady’ rate commentary calms market; China growth projection gains scrutiny
By S Jha
New Delhi, March 5: After Raphael Bostic, his Dallas Federal Reserve counterpart Lorie Logan has also lent his weight to calm the nerves by stating that “slow and steady” should be the way to stabilize the financial system. Bostic, the Atlanta Governor of the US Federal Reserve, had set the bulls on the rampage with his dovish remarks on the rate hikes. With Bostic and Logan striking similar stance, the fear factor in the US is seen to be subsiding as the Dow Jones and Nasdaq rallied sharply on Friday.
The ‘Two Sessions’ are highly watched out annual events in China. While Xi Jinping’s third term will be firmed up in this event, the global investors also decipher the growth projections made by Beijing. The event started on Saturday, and China has said that its growth will be five per cent in the next fiscal. This is sharply above three per cent growth rate, second worse since 1970s, for China, which may have consequences for the global economy.
The unabated global inflation is attributed to the supply side concerns along with the Ukraine War and the lingering impact of the Covid-19 pandemic. China after abandoning ‘Zero Covid Policy’ is seeking to retain the economic growth amid assessment in the Chinese Communist Party that the economic distress is among the reasons for the widespread protests seen in the country before the pandemic tsunami hit the country.
Nifty is now above the crucial psychological level of 17500. The market participants are betting on the index heavyweights also waking up to give support to the equity market. Reliance Industries, the index heavyweight, has consistently been taking support from the 2300 level to gain strength. The financials, including ICICI bank and HDFC Bank, are looking strong, while SBI is rallying in tandem with the Adani Group of companies.
The Adani stocks are witnessing massive investors’ interests after the group managed to board the US-based fund houses. Adani Enterprises and Adani Ports and SEZ are seen to be ripe for short covering. Both are the FnO stocks and also part of the index, which may bring positive impact on the bourses.
With the bond yields sobering in the US and rupee gaining strongly on Friday, the bulls are watching with fingers crossed if they would finally be able to take control of the market.
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