The US Federal Reserve voted to increase interest rates by 25 basis points (bps) at a two-day meeting of the Federal Open Market Committee (FOMC) on March 21st and 22nd, 2023. According to stock market analysts, Dalal Street was anticipating this 25 basis point interest rate rise and had already discounted it before the US Fed’s rate hike announcement on Wednesday. On Thursday, though, they anticipate an extremely tumultuous session. Short-term investors, according to market analysts, should search for high-quality pharma and FMCG companies that are offered at reduced and appealing values. Experts advise long-term investors to purchase on dips in auto, IT, and banking companies since these stocks may be targeted by bears after the conclusion of the FOMC meeting.
Strategy for Indian investors
On what Indian stock market investors should look at in US Fed’s statement post-FOMC meeting, Ravi Singhal, CEO at GCL Broking said, “Indian and other Asian stock market investors are advised to look at the US Fed’s statement on bank crisis in US because it is going to hit business of IT companies of India and other developing countries. As Jerome Powell has addressed the bank crisis in US, market is expected to take a sigh of relief from this statement.”
According to Ravi Singhal of GCL Broking, the US Fed’s rate rise would have little influence on Indian markets since it has already been discounted in the current sell-off. Still, Ravi Singhal thinks that good companies in the pharmaceutical and FMCG sectors would do better in the short term than companies in the IT and banking sectors.
Stocks to buy post-FOMC meeting
Ravi Singhal went on to say that short-term positioning investors should purchase quality pharmaceutical companies like Aurobindo Pharma and Zydus Life at favorable valuations after the recent massacre on Dalal Street. If someone is interested in FMCG stocks, he went on to say that Marico, Dabur, and ITC might be a bargain choice for up to three months.
Stocks to buy for long term
Long-term investors should consider Profitmart Securities’ Head of Research, Avinash Gorakshkar, who said, “After the US Fed’s 25 basis point rate rise, the US currency is projected to find support, putting pressure on the IT, banking, and export-oriented auto sectors. Positional investors, on the other hand, should see the drop in IT, auto, and banking stocks as a favorable buying opportunity. In the car sector, consider Mahindra & Mahindra (M&M), while in the banking sector, consider State Bank of India (SBI), Canara Bank, Axis Bank, and ICICI Bank.”
According to Ravi Singhal of GCL Broking, “If TCS becomes accessible at around $2900 to $3,000 per share in the near future, then it would be a significant buying opportunity for long-term IT stock investors.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Business Headline. We advise investors to check with certified experts before taking any investment decisions.