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US Fed rate hike: In two days Federal Open Market Committee (FOMC) meeting held during 21st to 22nd March 2023, the US Federal Reserve decided to raise interest rate by 25 bps. According to stock market experts, Dalal Street was expecting this 25 bps interest rate hike and it had already discounted itself before the US Fed's rate hike announcement on Wednesday. However, they are expecting highly volatile session On Thursday. Market experts advised short term investors to look at high quality pharma and FMCG stocks that are available at discounted and attractive valuations. For long term investors, experts suggested buy on dips strategy in Auto, IT and banking stocks as these stocks may come under the radar of bears after this outcome of  FOMC meeting.

Strategy for Indian investors

On what Indian stock market investors should look at in US Fed's statement post-FOMC meeting, Ravi Singhal, CEO at GCL Broking said, "Indian and other Asian stock market investors are advised to look at the US Fed's statement on bank crisis in US because it is going to hit business of IT companies of India and other developing countries. As Jerome Powell has addressed the bank crisis in US, market is expected to take a sigh of relief from this statement."

Ravi Singhal of GCL Broking said that US Fed's rate hike won't have much impact on the Indian markets as it has already discounted itself in recent sell off. But, Ravi Singhal maintained that for short term return from IT and banking sector will be outperformed by quality stocks of pharma and FMCG sector.

Stocks to buy post-FOMC meeting

Ravi Singhal went on to add that short term positional investors can buy quality pharma stocks like Aurobindo Pharma and Zydus Life as these pharma stocks are available at attractive valuation after the recent bloodbath on Dalal Street. He went on to add that FMCG stocks like Marico, Dabur and ITC can be a value pick for up to three months, if someone is interested in FMCG sector stocks.

Stocks to buy for long term

For long term investors, Avinash Gorakshkar, Head of Research at Profitmart Securities said, "After US Fed's 25 bps rate hike, US dollar is expected to find selling pressure and hence IT, banking and export oriented auto stocks are expected to become highly volatile. However, this volatility in IT, auto and banking stocks should be considered as good buying opportunity by positional investors. One should look at Mahindra & Mahindra (M&M) in auto segment while State Bank of India (SBI), Canara Bank, Axis Bank and ICICI Bank in banking space."

On IT stock to buy in the wake of 25 bps US Fed rate hike, Ravi Singhal of GCL Broking said, "If TCS becomes available at around 2900 to 3,000 apiece levels in near term, then it would be a big buying opportunity for long term IT stock investors."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Updated: 23 Mar 2023, 10:05 AM IST
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