Sensex, Nifty Fall, stagnant two-day winning streak after deep sell-off in global markets

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Stock Market India: Sensex Index Dropped More Than 200 Points in Early Trading

Equity benchmarks fell on Wednesday, stalling a two-day winning streak that followed a sea of ​​red in Asian stock markets after a deep sell-off in Wall Street stocks as investors braced for the US Federal Reserve’s aggressive rate hike later in the month. day.

“Domestic stocks are likely to pull back in early trading on Wednesday, coupled with weakness in Asian markets after US indices faltered overnight ahead of the Fed meeting,” said Prashanth Tapse, senior vice president. for Research at Mehta Equities, prior to opening. clock.

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“Markets are likely to trade in turbulent waters intra-day as traders look forward to the highly anticipated outcome of the US Fed’s policy meeting on interest rates,” he added.

The 30-share BSE Sensex Index fell 227.93 points to 59,491.81, and the broader NSE Nifty-50 Index fell 55.05 points to 17,761.20.

“The overarching trend in the market is now India’s outperformance against other markets, especially its parent market in the US. The big question is whether this outperformance can hold. This is possible as the Indian economy and corporate earnings are outperforming VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told ANI.

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However, the risk is the high valuation of Indian stocks, Vijayakumar said.

“If there is a sharp cut in the US market due to fears of a recession due to sharp rate hikes or if the war in Ukraine escalates, as some now fear, the Indian market will also be affected,” he added.

Shares in Asia fell after stocks fell on Wall Street, pushing the S&P 500 down more than 1 percent overnight, even as futures opened slightly higher on Wednesday.

The risk of a sharp rate hike by the Fed had markets on the brink, with an 81 percent chance of another 75 basis point gain and a 19 percent chance of a full percentage point gain.

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Markets are “seemingly well positioned for a 75 basis point increase alongside an aggressive update” from the Fed, Taylor Nugent, a market economist at the National Australia Bank in Sydney, wrote in a client note.

“Post-meeting comments and updated points will be critical,” said Mr Nugent, adding that the NAB was looking for a key rate of “around 4 percent” by the end of this year with no expected rate cuts. until 2024.

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