Sensex Opens Lower Tracking Global Cues; Telecom & Metal Stocks Lose

Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 1.7% while the Hang Seng is down 1.2%. The Shanghai Composite is trading down by 0.8%. US stocks declined sharply on Wednesday after the Federal Reserve's forecast of fewer interest-rate increases in 2019 fell short of investors' hopes of a more dovish monetary policy.

Back home, India share markets opened on a negative note. The BSE Sensex is trading down by 172 points while the NSE Nifty is trading down by 47 points. The BSE Mid Cap index opened the day on a flat note while BSE Small Cap index opened up by 0.3%.

Barring realty stocks & healthcare stocks, all the sectoral indices have opened the day in the red with telecom stocks and metal stocks leading the losers.

The rupee is currently trading at Rs 70.58 against the US$.

In the news from the American economy, the US Federal Reserve raised interest rates on Wednesday, as expected, but forecast fewer rate hikes next year. It further signaled its tightening cycle is nearing an end in the face of financial market volatility and slowing global growth.

The central bank said the US economy has been growing at a strong rate and the job market has continued to improve.

It noted that "some" further gradual rate hikes would be needed, a subtle change that suggested it was preparing to stop raising borrowing costs.

The rate hike, the fourth of 2018, lifted the target range for the Fed's benchmark overnight lending rate by a quarter of a percentage point to a range of 2.25% to 2.50%.

The decision to raise borrowing costs again is likely to anger US President Donald Trump, who has repeatedly attacked the central bank's tightening this year as damaging to the economy.

The Fed has been raising rates to reduce the boost that monetary policy gives to the economy, which is growing faster than what central bank policymakers view as a sustainable rate.

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Disclosure: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. ...

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