Friday, July 12, 2024
Home News Markets dip as Federal Reserve raises rates despite banking crisis

Markets dip as Federal Reserve raises rates despite banking crisis


The benchmark Sensex fell half a per cent after the US Federal Reserve raised interest rates by 25 basis points (bps) – the ninth straight hike since March 2022 – to curb stagnant inflation in the world’s largest economy.


The latest hike – which has raised rates from near zero last year to 4.75-5 per cent, the highest since 2007 – came despite turmoil in the banking sector.

Market losses were capped as investors bet the Fed raised rates despite no such signal from the US central bank. The benchmark Sensex ended the session down 289 points, or 0.5 per cent, at 57,925. The Nifty closed at 17,077, down 75 points or 0.4 per cent.


Foreign portfolio investors pulled out nearly Rs 1,000 crore from domestic stocks on Thursday, while domestic institutions bought Rs 1,668 crore.

Markets are “encouraged by the Fed’s less aggressive stance and the perception that the central bank will sharply reverse course on interest rates. While Powell pushed against it, markets had other ideas and it took the dollar to soften, yields to pull back.” And enabled gold to rally,” said Craig Erlam, senior market analyst at Oanda.

The Bank of England (BoE) joined the US and Norway to hike rates by 25 bps in the face of persistently high inflation.


Norges Bank on Thursday raised its benchmark deposit rate by 25 basis points to 3 per cent, the highest level since 2009, signaling further tightening against higher price pressures.


Experts said central banks globally have the delicate task of balancing inflationary expectations and ensuring financial stability.


Investors are betting on a rate cut later in the year. A section of the markets is forecasting a fall in Fed rates to 4.1 per cent by December.


Fed chief Jerome Powell himself said he does not expect a rate cut this year and will raise it further if needed.


“Domestic equities swing between gains and losses after the US Fed continued with its rate hike trajectory. The statement by the Treasury Secretary not to provide blanket insurance to all banks dampened sentiments. The US Fed gave the market a did little to provide concrete direction. Their resolve to contain inflation remains strong despite the ongoing banking turmoil,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.


The overall market breadth was negative with 1,379 scrips gaining and 2,137 scrips declining. Shares of Reliance Industries fell 1.3 per cent and Sensex lost 88 points. SBI declined the most among Sensex constituents at 1.7 per cent. FMCG stocks gained on demand as a safe investment option.


Shrikant Chauhan, Head of Equity Research, said, “For bulls, 17,050-17,000 will act as an important support zone, while 17,200-17,250 could act as a major resistance zone for short-term traders. However, below 16,950, the uptrend will weaken ” In Kotak Securities.



Markets end FY23 in style; Sensex Nifty rally nearly 2% on firm global trends

Market, The final day of the fiscal year 2022-23 saw gains for benchmark indices, with a gain of nearly 2% on Friday, extending gains for...

Day trading guide for today: 6 stocks to buy or sell on Friday — 31st March

Trading, Day trading guide for today: Indian shares gained on Wednesday as global markets' increased risk appetite was aided by easing in the banking industry....

Financial, IT stocks aid Indian shares snap three-month losing streak

Financial, By Bharat Rajeshwaran BENGALURU (Reuters) - Indian shares rose on Friday, supported by a higher weighting of financial stocks and information technology (IT) stocks,...


Please enter your comment!
Please enter your name here


Most Popular

Trading the Inside Bar Pattern on Pocket Option Platform

Inside Bar Pattern Introduction Price movement on a chart is examined in price action trading. You may use candlesticks to predict where prices will move...

“Unlocking the Secrets: 4 Tricks of Successful Traders on Pocket Option Platform”

For a year, I have been trading on the Pocket Option platform. I sometimes succeed and sometimes fail. However, I was confident that if...

Identifying Mistakes That Lead to Losses on Pocket Option

Why do people lose their money when trading binary options New traders frequently take a significant financial risk while trading binary options. As a result,...

Weekly Income Plan on Pocket Option Platform”

Get weekly returns on Pocket Option It turned out that October was a terrific month for me. I am still able to generate money every...

Recent Comments