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Markets soar nearly 1% as macro trends point to a rapid rebound

The stock market benchmark indices closed nearly 1% higher on Monday as investors returned to trading after a three-day Diwali hiatus. The improvement in macro trends has raised expectations for a faster economic recovery in the country.

The BSE Sensex scored 477.99 points, or 0.80%, at 60,545.61, while the Nifty gained 151.75 points, or 0.85%, to 18,068.55. “Despite a subdued opening, the domestic indices made up for early losses, helped by cheap macros such as the fuel tax cut, improved PMI numbers and higher Christmas sales. On a global level, the Fed’s policy announcement was in line with market assessments, which initially began with a gradual throttling, fueling sentiment in emerging markets. In addition, investors remained somewhat cautious about the US consumer data due to be released later this week, ”said Vinod Nair, research director at Geojit Financial Services.

The US Federal Reserve announced on Wednesday, as widely expected, its monthly purchases of government bonds and mortgage-backed securities of $ 120 billion in 2022.

The US Federal Reserve said it would be “patient” in deciding when to raise its reference overnight rate from near zero to counter rising bets in financial markets that inflation would cause the central bank to withdraw its support Pandemic era to end for the economy sooner than later.

According to Michel Vernier, Head of Fixed Income Strategy, Barclays Private Bank, the Federal Reserve lacks sufficient urgency to deal with sluggish inflation.

“Chairman Jerome Powell may now sound a little too much like a broken record to the market: ‘Inflation has risen, largely reflecting factors that are likely to be temporary,’ and ‘easing supply constraints is expected to see continued gains in economic activity and employment as well as a reduction in inflation. “End, which leads to a certain bear steepness,” said Vernier.

In the first or second quarter of next year at the latest, Barclays sees a continuation of the flattening trend, driven by higher two-year interest rates.

Meanwhile, the Indian volatility index, or VIX, rose 3.76% on Monday, suggesting mounting concern among investors.

Siddhartha Khemka, Head Retail Research at Motilal Oswal Financial Services Ltd. Additionally, this is the final week of the earnings season that would keep the markets volatile. There would be a lot of stock specific action in the market. “

Reuters contributed to the story.

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