Indian shares seen opening flat after Fed signals more hikes; NSE IPO in focus

Indian shares are set for a muted start on Thursday after the US Federal Reserve raised interest rates and signalled further hikes, while elevated crude prices and ​a busy primary market led by the National Stock Exchange of India’s IPO ‌opening are expected to weigh on sentiment.

GIFT Nifty futures were trading around 23,224.5 points, as of 7:58 a.m. IST, indicating a flat start for the Nifty 50 index, which closed at 23,217.60 on ​Wednesday.

The Fed raised rates by 25 basis points in a unanimous decision, its first ​increase in more than three years. Updated quarterly projections showed that 16 of ⁠18 policymakers expected at least one additional 25-basis-point increase by year-end.

Higher U.S. interest rates ​reduce the appeal of emerging markets such as India for global investors. They may also ​pressure sectors including information technology, where companies derive a significant portion of revenue from the United States.

Brent crude eased slightly to about $106 a barrel after reports that Saudi Arabia had offered additional cargoes through Oman, ​easing some concerns over supply disruptions.

However, restrictions around the Strait of Hormuz and persistent ​geopolitical risks continue to cloud the oil market outlook.

Investors will also watch the NSE IPO, which opens ‌on ⁠Thursday and becomes the fifth active offering in the primary market.

The exchange allocated shares worth 67.46 billion rupees ($703.07 million) to anchor investors on Wednesday, including Norway’s and Abu Dhabi’s sovereign wealth funds, at 1,785 rupees apiece, the upper end of the IPO price band.

“With the IPO ​pipeline so crowded, a ​substantial amount of ⁠liquidity is likely to be absorbed by the primary market,” said Arun Kejriwal, founder of Kejriwal Research and Investment Services.

“Investor attention is ​overwhelmingly focused on new issues, leaving the secondary cash market relatively ​neglected.”