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US Market gains as Fed raises rates hike
(02 Feb 2023, 09:06)
The US stocks moved sharply higher on Wednesday, 01 February 2023, with the Dow, the S&P500, and the Nasdaq Composite indexes finishing the day in positive territory, as investors reacted positively to the Federal Reserve announcement of widely expected decision to raise interest rates by another quarter point and signalled of further rate hikes.

At the close of trade, the Dow Jones Industrial Average index advanced 6.92 points, or 0.02%, to 34,092.96. The S&P500 index was up 42.61 points, or 1.05%, to 4,119.21. The tech-heavy Nasdaq Composite Index increased by 231.77 points, or 2%, to 11,816.32.

Total 10 of 11 sectors ended higher along with the S&P500 Index. Information technology was top performing sector, adding 2.29% followed by consumer discretionary (up 1.89%), communication services (up 1.35%), and consumer staples (up 0.76%) sectors.

The Federal Reserve extended its fight against high inflation on Wednesday by raising its key interest rate a quarter-point, its eighth hike since March. And the Fed signaled that even though inflation is easing, it remains high enough to require further rate hikes.

After a two-day meeting, the Fed said it has decided to raise the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent. The latest interest rate hike comes after the central bank raised rates by 75 basis points in November and by 50 basis points in December.

During his post-meeting press conference, Fed Chair Jerome Powell said the central bank does not believe rates are yet at a sufficiently restrictive policy stance and suggested a couple of more rate hikes will be needed to get to that level. The Fed also said it anticipates ongoing increases in interest rates will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.

Payroll processor ADP released a report showing private sector job climbed by 106,000 jobs in January after surging by an upwardly revised 253,000 jobs in December.

A separate report released by the Institute for Supply Management showed manufacturing PMI dipped to 47.4 in January from 48.4 in December, with a reading below 50 indicating a contraction.

Among Indian ADR, ICICI Bank declined 3.36% to $20.13, INFOSYS was up 1.17% at $19.02, WNS Holdings inclined 1.52% to $86.02, Azure Power Global added 2.7% to $4.71, and Dr Reddy's labs added 0.15% to $53.88. Wipro added 0.6% to $4.92. HDFC Bank was down 4% at $64.68.

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