Indian stock indices fell sharply on Thursday morning, tracking declines in the benchmark US stock market, whose central bank Federal Reserve said another interest rate hike may be necessary to control inflation and bring it to the target level of 2%.
At the time this report was being written, the Sensex and Nifty were down 0.3-0.4% from their previous day’s closing. The top losers among the Nifty sectoral indices were Nifty FMCG and Nifty IT, while the top gainers were Nifty PSU bank and Nifty consumer durables. According to the minutes of the US central bank’s July monetary policy review meeting, the majority of attendees continued to see significant upside risks to inflation and noted that additional tightening of monetary policy may be required.
The US central bank in its July meeting raised its benchmark interest rate by 25 basis points, the highest in the past 22 years at 5.25-5.5 per cent.
“Global cues for markets continue to be weak. There are two negatives weighing on global stock markets now: One, the US Fed minutes indicate that one more rate hike may be needed in this rate hiking cycle to tame inflation,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.