Sensex, Nifty edge higher as crude eases; Fed rate hike caps gains

New Delhi: Benchmark indices Sensex and Nifty edged higher in early trade on Thursday as crude oil prices eased from recent highs, offering some relief to investors. Gains, however, remained limited after the US Federal Reserve raised interest rates and signalled further tightening.

The 30-share BSE Sensex gained 86.49 points to 74,422.94 in early trade, while the NSE Nifty rose 50.1 points to 23,267.70.

Persistent foreign fund outflows and a mixed trend across Asian markets also kept domestic equities under pressure.

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Fed rate hike keeps markets cautious

The US Federal Reserve raised its policy rate by 25 basis points to 3.75-4 percent, its first increase in three years, and indicated another hike could follow this year.

“While a pullback in Brent crude to around USD 104.7 a barrel from its recent high offers some marginal relief, the Federal Reserve's rate hike and indication of further tightening could keep markets volatile and limit any immediate recovery,” said Hariselvan Radhakrishnan, Founder and CEO of HST Wealth.

Higher US interest rates could strengthen the dollar, put pressure on the rupee and weigh on foreign investment flows into emerging markets such as India, he added.

Brent crude, the global oil benchmark, was trading 0.12 percent lower at USD 105.7 per barrel.

Eternal, Bajaj Finance among gainers

Among Sensex stocks, Eternal, Bajaj Finance, Bharat Electronics, Mahindra & Mahindra and Bajaj Finserv were among the major gainers.

HCL Tech, HDFC Bank, Tata Consultancy Services, Infosys and Tech Mahindra were among the laggards.

Foreign Institutional Investors sold equities worth Rs 2,032.61 crore on Wednesday, according to exchange data.

Asian markets presented a mixed picture. South Korea's Kospi and Japan's Nikkei 225 traded higher, while China's Shanghai Composite and Hong Kong's Hang Seng were in negative territory. US markets had ended lower on Wednesday.

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NSE's Rs 22,569-crore IPO opens

Investor attention was also on the National Stock Exchange, whose much-awaited Rs 22,569-crore initial public offering opened for subscription on Thursday.

In the previous session, the Sensex had gained 332.63 points, or 0.45 percent, to close at 74,336.45. The Nifty advanced 99 points, or 0.43 percent, to settle at 23,217.60.

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