Indian Stock Market Closes Lower After Fed Rate Hike
The Indian stock market closed lower on Wednesday, June 15, as investors were shocked by the U.S. Federal Reserve’s decision to raise interest rates by half a percentage point. The Sensex, the benchmark index of the Bombay Stock Exchange, fell 311 points, or 0.49%, to close at 62,918. The Nifty, the benchmark index of the National Stock Exchange, fell 68 points, or 0.36%, to close at 18,688.
The Fed’s decision was unexpected by many investors, who had been expecting the central bank to pause its rate-hike cycle. The rate hike was the largest since 2000, and it signaled that the Fed is committed to bringing down inflation, which is at a 40-year high.
The Fed’s move was met with a sell-off in global stock markets. The U.S. stock market closed lower on Tuesday, and European stock markets were also down on Wednesday.
The Indian market opened lower on Wednesday, but it briefly rallied in the morning. However, the market could not sustain the gains and closed lower. The metal, banking, and financial sectors were among the worst performers.
The European Central Bank (ECB) and the Bank of Japan (BoJ) also met on Wednesday, but their decisions did not have much impact on the Indian market. The ECB left its interest rates unchanged, while the BoJ maintained its ultra-easy monetary policy.
The mid-cap index was positive on Wednesday, along with some sectors like healthcare, pharmaceuticals, and retail.
The outlook for the Indian stock market remains uncertain. The Fed’s rate hike will likely lead to higher borrowing costs and slower economic growth. This could weigh on corporate earnings and stock prices. However, the market could also benefit from strong corporate earnings and a recovery in economic growth.
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