Fears of a Fed rate hike cause stock markets to end flat.

Stock Markets

Indian stocks were all over the place on Thursday, but they ended the day just a little bit higher thanks to gains in high-weighted financials and tech stocks and a drop in Adani Group stocks that helped to offset worries about the U.S. Federal Reserve’s plans to raise interest rates.
The Nifty 50 index ended up 0.12%, at 17,893.45, while the S&P BSE Sensex ended up 0.3%, at 60,806.22.

Both indexes moved between 0.35% gains and 0.6% losses, which is a narrow range.
Eight of the 13 major sector indexes went down, and the metals index went down by 1.58 percent. With a nearly 20% weight on the metal index, Adani Enterprises led the drop.

Financial stocks went up by 0.14 percent, and IT stocks went up by 0.7%.

Twenty-five of the stocks in the Nifty 50 fell, with Adani Enterprises falling 11% and Adani Ports falling 2.83%.

After falling sharply after a report from U.S. short-seller Hindenburg Research on January 24 that raised concerns about the conglomerate’s finances, Adani Group shares had gained back their losses for two days in a row.
But on Thursday, the index provider MSCI said it had decided that some Adani securities shouldn’t be called “free float” anymore.

The MSCI index weighting is used as a benchmark by a number of institutional investors and funds. Two analysts said that if the weightage of Adani stocks goes down after a review, it could lead to outflows and a further drop in value.

After key Fed officials had different ideas about rate hikes, stocks on Wall Street fell overnight.

Christopher Waller, one of the Fed’s governors, said that reaching the 2% inflation goal “might be a long fight,” but Lisa Cook, another governor, was optimistic about a “soft landing.” In a speech on Tuesday, Jerome Powell, the head of the Fed, said that “disinflation” was happening.

Also read:- LIC Chairman: Will soon meet with top management of the Adani Group

Astha Jain of Hem Securities said that despite the Federal Reserve’s actions, inflation is not likely to fall off a cliff quickly. She also said that uncertainty in the domestic markets is likely to continue in the first half of this year.

Analysts say that the fall in the dollar index could be good for emerging markets like India, but that high valuations and foreign selling are still a worry.