Global Equities Witness Sharp Correction Amidst Fed’s Hawkish Stance
Last week, global equities markets experienced a significant downturn, with the Indian benchmark indices, the Sensex and Nifty 50, plunging over 2.5% each, marking the end of a robust three-week rally. The Nifty Bank index faced even greater losses, falling by approximately 3.5% during the week. The main catalyst for this market turmoil was the US Federal Reserve’s indication that it plans to keep interest rates higher for an extended period, causing unease among riskier assets, particularly equities.
Current Market Conditions of global equities:
The ongoing turmoil in the global equity markets continues, with the BSE Sensex opening 0.87% lower at 66,608 and reaching an intraday low of 66,137. Over the last three sessions of the truncated week, the 30-share index has shed more than 1,600 points, dropping from 67,838 to 66,219.
Key indices, namely Nifty 50 and Bank Nifty, have also faced substantial selling pressure this week. Nifty experienced a decline of over 450 points in the same three sessions, while Bank Nifty saw a drop of around 1,200 points.
Factors Contributing to Market Turbulence:
Several factors have combined to create a negative sentiment in the Indian stock market:
- FIIs Turning Sellers: Foreign Institutional Investors (FIIs) have become net sellers, offloading shares worth ₹1,236.51 crore on Monday and ₹3,110.69 crore on Wednesday.
- Stronger US Dollar: The US dollar has gained strength against major global currencies, impacting various assets, including equities.
- Fed’s Hawkish Stance: The US Federal Reserve decided to maintain unchanged interest rates but raised the median rates from 4.60% to 5.10%, signaling minimal chances of a rate cut in the short to medium term. This raised concerns about potential future rate hikes.
- Rising Crude Oil Prices: The surge in crude oil prices in the international market has fueled expectations of inflation pressure on the US Fed, further contributing to market uncertainty.
- Profit Booking: Indian stock market indices were already at record highs, leading to profit booking.
Crucial Levels for Key Indices:
Investors are advised to pay attention to key support and resistance levels for the indices when making investment decisions:
- Sensex: Key support levels are situated at 65,700 to 65,500, with a potential upward trend reversal towards 68,000.
- Nifty: Major support is seen at 19,600 to 19,500, while resistance is likely at 20,300.
- Bank Nifty: The chart indicates significant support around 44,500 to 44,300, with the possibility of a rebound to 46,000 to 46,500 in the near term.
Investors are urged to consider a “buy on dips” strategy in the current market conditions.
Disclaimer: Any views and investment tips expressed by any author, investment experts or agencies here on MSTimes are their own and not those of mine or website. I advises users to consult/check with certified Financial experts / advisors before taking any investment decisions.
