Will the Nikkei's rebound after a two-week low have a ripple effect on Indian markets? The answer lies in understanding the impact of Japan's interest rate hike on global markets.
The Nikkei rose 0.26% to close at 49,512.28, driven by technology stocks tracking overnight gains on the Nasdaq. But what does this mean for investors?
The Nikkei's recovery comes ahead of the Bank of Japan's policy decision, which is expected to raise interest rates by 25 basis points to 0.75%, a three-decade high.
Historically, the Nikkei's performance has had a significant impact on the Indian market, particularly on the Nifty and Sensex. With the Bank of Japan's interest rate hike, Indian investors should be prepared for potential fluctuations in the market.
In the Indian market context, the Bank Nifty is likely to be affected by the interest rate hike, as it is heavily influenced by global market trends. Moreover, the psychology of traders plays a significant role in such scenarios, as they tend to take profits after strong advances in technology shares.
The demand from individual investors looking to buy on dips should provide support to the market, but it's crucial to understand the historical behavior of the market during similar events.
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Disclaimer: The views expressed in this article are for educational purposes only and should not be considered as investment advice.
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