Indian equity benchmarks reversed sharp rises earlier in the session to end modestly higher on Wednesday, extending gains for the second straight session.
Investors broadly overlooked the risks from renewed restrictions in China due to a flare-up in Covid cases there and instead were focussed on the minutes from the Federal Reserve’s latest meeting.
The BSE Sensex index rose a modest 91.62 points, or 0.15 per cent, to close at 61,510.58, and the broader NSE Nifty index edged 0.13 per cent, or 23.05 points, higher to end at 18,267.25.
Asia shares, European stocks and US equity futures were steady after rising in the previous session as investors await the release of the policy minutes from the Fed most recent meeting for clues on the trajectory of rate hikes.
But, given that Thursday is the US Thanksgiving holiday, market trading volumes are anticipated to be thin.
While some investors believe that the Fed may decide to scale back the amount of its rate increases as early as next month’s meeting in response to lower-than-expected inflation numbers, US policymakers have said otherwise in recent days.
“Since the meeting, the market has swung in anticipation of what could happen in December, and this week’s minutes could help to confirm the Fed’s intent,” said economists at Rand Merchant Bank in Johannesburg, according to a Reuters report.
“The risk to the markets from the minutes is that they appear less hawkish than expected, which could drive an unwind of some of the rate-hike risk repricing we saw at the end of last week.”