Indian stock market: Sensex index drops more than 200 points at the beginning of the session
Stock benchmarks fell on Wednesday, stalling a two-day winning streak, tracking a sea of red across Asian markets following a deep sell-off in Wall Street stocks as investors brace for a rally in profits. positive rate of the US Federal Reserve at the end of the day.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, said: “Domestic equity markets are likely to fall in early Wednesday trading, along with weakness seen across European markets. Asia after US indexes faltered overnight ahead of the Fed meeting,” Prashanth Tapse, Senior Vice President of Research at Mehta Equities, said before the opening. bell.
“Markets are likely to trade in changing waters on the day, as traders look to the outcome of the Fed policy meeting on interest rates,” he added.
The 30-stock BSE Sensex index fell 227.93 points to 59,491.81 and the broader NSE Nifty-50 index dropped 55.05 points to 17,761.20.
“The overarching trend in the market right now is India’s outperformance over other markets, especially the US parent market. The big question is whether this outperformance can be sustained. This is possible because the Indian economy and corporate earnings are outperforming,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told ANI.
However, the risk is that Indian stocks are overvalued, Mr. Vijayakumar said.
He added: “If the US market gets a sharp cut due to recession fears caused by sharp interest rate hikes or if the Ukraine war escalates, as some fear now, then the Indian market will also suffer. affected.
After the Reserve Bank of India removed the state-owned commercial bank from its list of rapid remedial actions, shares of the Central Bank of India jumped 12%.
Stocks in Asia fell after a decline in shares on Wall Street, which pushed the S&P 500 index down more than 1% overnight, even as futures showed a slightly higher open on Wednesday. Private.
Risks from a sharp Fed rate hike have brought markets to the brink, with futures pricing having an 81% chance of a further 75 basis points and a 19% chance of a full percentage point rise.
Taylor Nugent, Market Economist at National Australia Bank in Sydney, wrote in a client note that the markets “seem to be well positioned for a 75 basis point rally alongside a hawk update”.
“The post-meeting commentary and updated dots will be key,” Nugent said, adding that the NAB is looking for a policy rate of “around 4%” by year-end. and is not expected to cut rates until 2024.
