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MUMBAI: Indian stock markets are expected to be volatile on Thursday, with SGX Nifty futures suggesting a positive start for domestic benchmark indices. On Wednesday, the BSE Sensex ended at 57,788.03, down 329.06 points or 0.57%.
Asian stocks followed Wall Street higher on Thursday after the US Federal Reserve said it would end bond-buying stimulus in March to set up three interest rate increases next year to tackle heated inflation.
Bond yields rose while the dollar stabilized after slumping overnight as havens fell out of favour. Gold gained along with crude oil.
Japan's Nikkei climbed 1.67% and touched a three-week intraday high, while Taiwan's benchmark gained 0.62%.
Mainland China shares slipped though, with an index of blue chips losing 0.12%. MSCI's broadest index of Asia-Pacific shares added 0.26%.
The Federal Open Market Committee (FOMC) laid out a scenario in which the covid-19 pandemic, despite the emergence of the Omicron variant, gives way to a benign set of economic conditions, with inflation easing largely on its own, interest rates increasing comparatively slowly, and the unemployment rate staying low in coming years.
Back home, debt-ridden telecom operator Vodafone Idea has paid holders of non-convertible debentures that matured early this week, according to a regulatory filing. The company made the payment on 13 December, the date of maturity of the bonds, averting financial default.
Yes Bank Ltd has filed a petition in a Mumbai company court against the family promoters of Dish TV India Ltd saying it fears that a lawsuit could be brought against the bank, limiting it from voting at Dish TV’s annual general meeting (AGM) on 30 December.
Money markets see good odds for a first Fed hike by May, followed by more by September and December, although three quarter-point rate increases aren't fully priced until February 2023.
Ten-year U.S. Treasury yields edged up to 1.4718%, adding to Wednesday's advance.
The US dollar index , which measures the currency against six major peers, was 0.02% higher at 96.399, stabilizing after a 0.21% loss overnight.
Gold rose 0.16% to $1,779.88.
US crude and Brent each advanced about $1 to $71.85 and $74.78, respectively.
Attention now turns to policy announcements later Thursday from the European Central Bank and the Bank of England, which are also facing heated inflation.
The banks are trying to balance the need to support economies threatened by the coronavirus with the need to withdraw easy money to cool inflation.
The ECB is expected to dial back stimulus one more notch, but will pledge copious support for the next year, sticking to its long-held view that price pressures will abate on their own.
However, investors sharply increased their bets that the BoE is about to raise rates after a report on Wednesday showed British consumer price inflation surging in November to its highest in more than 10 years, exceeding all forecasts from economists. read more
Sterling eased to $1.32575 after climbing 0.28% overnight.
The euro slipped 0.07% to $1.1287 following Wednesday's 0.34% jump.
(Reuters contributed to the story)
