After opening the day on a flat note, share markets in India witnessed volatile trades and are presently trading marginally lower. Sectoral indices are trading on a negative note with stocks in the power sector and consumer durables sector witnessing maximum selling pressure.

The BSE Sensex is trading down 132 points (down 0.3%) and the NSE Nifty is trading down by 33 points (down 0.3%). The BSE Mid Cap index is trading down by 0.5%, while the BSE Small Cap index is trading down by 0.7%. The rupee is trading at 64.25 to the US$.

In the news from global financial markets, the US Federal Reserve raised its interest rates by 25 basis points in its policy meet yesterday. This marks as the third rate hike by the Fed this year.

As per the news, the US Fed took the decision to raised interest rates on expectations that the job market will remain robust. According to the quarterly economic projections, Fed officials expected the unemployment rate will maintain at 4.1% by the end of 2017 and will further drop to 3.9% in 2018.

The Fed also raised forecast for economic outlook and noted that there are hopes that the US economy will grow 2.5% both in 2017 and 2018. This was higher than its forecasts in September which projected a 2.4% growth for 2017 and 2.1% increase for 2018.

Regarding the Fed's balance sheet, the central bank confirmed that it would step up the monthly pace of shrinking its balance sheet, as scheduled, to US$ 20 billion.

Note that the Fed plans to start normalizing its US$4.5 trillion balance sheet. The central bank is said to trim its holdings of US Treasury bonds and mortgage-backed securities.

Normalising the balance sheet could impact emerging markets.

Regarding upcoming rate hikes, the Fed currently predicts three more hikes in 2018. How this pans out and what impact it will have on the global financial markets remains to be seen. We'll keep you updated on the developments in this space.

In the news from commodities market, crude oil is witnessing buying interest today.

Most of the gains are seen as industry data yesterday showed a larger-than-expected drawdown in US crude stockpiles. Gains were also seen after the shutdown of the Forties North Sea pipeline hit supply levels from a market that was already tightening due to OPEC-led production cuts.

Owing to the above developments, brent crude oil, the international benchmark for oil prices, jumped above US$ 65 per barrel for the first time since 2015.

Note that crude oil prices have been witnessing a rising trend this year, as can be seen from the chart below:

Crude Oil Hits 28-Month High

However, rising crude oil prices do not bode well for the Indian economy. This we say is because India is hugely dependent on petroleum imports. In fact, the share of petroleum imports for India has only increased over the years.

India is the world's third-largest oil consumer. And energy consumption in India is set to grow as our economy remains one of the few 'bright spots' in a slowing, aging world economy. And India could face a potent risk with a rise in crude oil prices.

The only way out for India is to reduce its dependence on oil imports and achieve fuel-sufficiency.