Sensex Opens Over 100 Points Up; Energy & FMCG Stocks Gain

Asian stock markets are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 0.4% while the Hang Seng is down 0.1%. The Shanghai Composite is trading down by 0.3%. Meanwhile, the benchmark S&P 500stock index ended little changed in a choppy trading session on Tuesday as the possibility of a partial US government shutdown raised investor jitters ahead of a highly anticipated meeting of the Federal Reserve.

Back home, India share markets opened on a positive note. The BSE Sensex is trading up by 102 points while the NSE Nifty is trading up by 39 points. The BSE Mid Cap index opened the day up by 0.5% while BSE Small Cap index opened up by 0.4%.

Barring IT stocks, all the sectoral indices have opened the day in green with energy stocks and FMCG stocks leading the gainers.

The rupee is currently trading at Rs 69.98 against the US$.

The Indian rupee on December 18 rallied by a whopping 112 paise, its best single-day gains in over five years, to settle at 70.44 against the US dollar.

The rally came on the back of softening crude oil prices eased concerns over India's current account deficit expansion. According to commerce ministry data, India's trade deficit came down to US$ 16.7 billion in November 2018 from US$ 17.1 billion in October this year.

The US Federal Reserve's monetary policy decision is expected to be out today. As per the reports, the market is expecting another rate hike when the FOMC meets for the last time this year, although traders will be more interested in the Federal Reserve's dot plot and the outlook for the American economy next year. Besides, the American currency's weakness against its major rivals globally helped the rupee further its gains.

How does a US interest rate hike affect Indian investors?

The instant effect is foreign money moving out of India's vaults. This means a slight correction in the share market in India, albeit temporarily.

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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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