Indian Stock Markets Decline as Investors Await US Fed’s Decision
On Thursday, Indian stock markets saw a decline of over one percent as investors awaited remarks from US Federal Reserve Chair Jerome Powell regarding future interest rate decisions. The BSE Sensex fell by 1.06% or 850 points to 79,528, while the NSE Nifty dropped by 1.16% or 285 points to 24,199. Investors are anticipating a 25 basis point rate cut by the US Fed.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the potential impact of former President Trump’s ‘America First’ policies. He noted that while these initiatives could strengthen the US economy, imposing high tariffs on imports could lead to inflation, affecting the Fed’s rate cut policy and global stock markets.
Foreign Institutional Investors (FIIs) have been selling off equities, with Rs 4445.59 crore offloaded on Wednesday, following a record Rs 94,000 crore in October. The market breadth was negative, with 46 out of 50 Nifty stocks in the red, including Hindalco and Adani Enterprises. Only four stocks, such as Apollo Hospitals and Tata Consultancy Services, closed positively.
All sectoral indices on the NSE ended in the red, with declines in auto, metal, power, telecom, pharma, and realty sectors. Experts suggest that the market remains cautious ahead of the US Federal Reserve’s monetary policy announcement.
Jitendra Gohil, Chief Investment Strategist at Kotak Alternate Managers, mentioned that Trump’s policies could lead to a stronger dollar and higher US yields, potentially causing the rupee to depreciate and Indian yields to rise. The strengthening dollar has already led to a surge in US Treasury yields, impacting commodity prices and gold.
Doubts Revealed
US Fed -: The US Fed, or the United States Federal Reserve, is like a big bank for the country. It helps control the money supply and interest rates to keep the economy stable.
BSE Sensex -: BSE Sensex is a number that shows how well the top 30 companies in India are doing in the stock market. If the number goes down, it means these companies are not doing as well.
NSE Nifty -: NSE Nifty is similar to BSE Sensex but includes 50 top companies in India. It helps people understand how the stock market is performing.
Basis point -: A basis point is a tiny unit used to describe changes in interest rates or other financial percentages. One basis point is equal to 0.01%.
FIIs -: FIIs stands for Foreign Institutional Investors. These are people or companies from other countries who invest money in India’s stock markets.
Rupee -: The rupee is the currency used in India, just like the dollar is used in the United States.
Indian yields -: Indian yields refer to the interest rates on government bonds in India. They show how much return investors can expect from these bonds.
