Foreign Institutional Investors (FII) and Domestic Investors Show Divergent Trends on July 26
- FIIs Acquire Shares Worth Rs 922.84 Crore
- DIIs Purchase Shares Worth Rs 470.10 Crore
GIFT Nifty Points to Flat Opening, While Nifty50 Records Bullish Candlestick on July 26
Gold prices continued to rise on Wednesday, supported by a decline in the dollar and bond yields following the anticipated interest-rate hike by the U.S. Federal Reserve. U.S. gold futures settled at $1,974.90, recording a 0.5 percent increase.
The Federal Reserve implemented a quarter percentage point interest rate hike on Wednesday, marking the 11th increase in the central bank’s last 12 policy meetings. The accompanying policy statement indicated the possibility of further rate hikes in the future.
On Wednesday, the US Federal Reserve raised its benchmark lending rate to the highest level since 2001 as a measure to address above-target inflation and hinted at the possibility of further rate increases in the future.
The quarter percentage-point increase brought the Fed’s key lending rate to a range between 5.25 percent and 5.5 percent, with the central bank stating that it will continue to analyze additional information and its implications for monetary policy.
The rate-setting Federal Open Market Committee (FOMC) used language similar to its previous meeting in June, indicating that policymakers might consider another pause at their upcoming meeting in September. However, the Fed also stated its intention to assess various data points to determine the extent of additional policy firming, suggesting the likelihood of more tightening measures. This aligns with the median forecast of two additional rate hikes this year, as projected during the last FOMC meeting in June.
Oil prices experienced a decline of approximately 1 percent on Wednesday, influenced by two key factors: U.S. crude inventories falling less than anticipated and the Federal Reserve’s decision to raise interest rates by a quarter of a percentage point. Brent crude futures concluded the day down by 72 cents, equivalent to a 0.9 percent decrease, settling at $82.92 per barrel. Similarly, U.S. West Texas Intermediate (WTI) crude settled at $78.78, reflecting an 85 cents or 1.1 percent decrease.
Earlier during the session, both benchmarks had dropped by over $1, despite reaching three-month highs on Tuesday. The rate hike, marking the 11th increase in the last 12 meetings, resulted in the benchmark overnight interest rate ranging from 5.25% to 5.50%. The accompanying policy statement indicated the possibility of further rate increases in the future.
