Indian share prices may hit a record high if the US Federal Reserve opts to cut rates at its monetary policy meeting, dealers said on Friday. For the week to September 14, the Mumbai stock exchange's 30-share benchmark Sensex index rose marginally by 0.08 percent or 13.38 points to 15,603.8.
Earlier this week the markets were rangebound, and lost most intraday gains Friday on global credit worries.
Analysts now expect the US Federal Reserve to cut rates by a quarter point from 5.25 percent to ease credit concerns when it meets on Tuesday.
"The expected Fed rate cut is to be a sentiment-positive. We expect the market to consolidate over the short term," Bharat Iyer, head of India equity research at J. P Morgan, said in a note to clients.
"While the expected 25 basis point Fed rate cut is likely to support equity market sentiment, the market will subsequently have to contend with the slowing earnings growth outlook," he said.
The release of India's second-quarter earnings data starts in early October.
Price data released Friday was well under the central bank's targets. Inflation slipped to 3.52 percent for the week ended September 1, from 3.79 percent for the previous week.
Analysts said that weaker-than-expected industrial production of 7.1 percent announced earlier this week, provided further evidence of moderation in economic activity.
At Friday's close, the Sensex was down 1.21 percent from its record close of 15,794.92 on July 24. Overseas funds have invested 9.27 billion dollars in Indian equities so far this year, more than twice the 4.27 billion dollars they pumped in during the same period last year.
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