After the Reserve Bank of India increased its main lending rate by a bigger than generally anticipated 50 basis points, marking the third consecutive increase, Indian equities benchmarks ended the day slightly higher.
The broader NSE Nifty experienced violent swings on Friday but finished the day at 17,397.50, up by 15.50 points, or 0.09 percent, while the 30-share BSE Sensex index eked out a 0.15 percent gain of 89.13 points to 58,387.93.
Despite the RBI has increased its benchmark lending rate to its highest level since 2019.
After the Reserve Bank of India increased its main lending rate by a bigger than generally anticipated 50 basis points, marking the third consecutive increase, Indian equities benchmarks ended the week with gains.
In an effort to rein in soaring inflation, central banks around the world have been hiking interest rates, but this week saw a recovery in European stocks that brought them close to two-month highs.
“Equity futures have grown comfortable with the idea that interest rate hikes that the central banks are putting through will be sufficient to contain inflation in the longer term,” said Kiran Ganesh, multi-asset strategist at UBS.
But there is a slowdown in other asset groups.
The difference between the yields on two-year Treasury notes and 10-year Treasury notes, which is a key indicator of the US Treasury yield curve, reached 39.2 basis points on Thursday, the steepest inversion since 2000.
A future recession is frequently predicted by an inverted yield curve.
After falling to its lowest levels since February in the previous session, oil prices increased this session. Lack of supplies worries outweighed worries about declining fuel consumption.
Global crude oil markets continued to be firmly in backwardation, which indicates limited supply because immediate prices are greater than those in the future months.
Investors will examine US jobs statistics to determine whether the Federal Reserve’s rapid rate hikes are beginning to hinder economic growth.