Markets stumble for fifth day as Fed hike triggers recession fears

New Delhi, June 16

Equity benchmarks stumbled for the fifth straight day to finish at over one-year low on Thursday, after the US Federal Reserve hiked rates by 75 basis points to tame surging inflation.

The US central bank delivered its biggest interest rate hike since 1994 and indicated further policy tightening this year as the focus shifts to taming price rise which has soared to over four-decade high. The Fed also projected slowing US economic growth.

Across-the-board selling played havoc on the domestic indices, with index majors Reliance Industries and HDFC twins contributing most to the decline.

Despite a smart rally in morning trade, the Sensex failed to hold on to the gains and plummeted 1,045.60 points to settle at 51,495.79 — the lowest in over 12 months. On similar lines, the NSE Nifty plunged 331.55 points to close at 15,360.60.

Nifty has broken its important support zone of 15,735 and is witnessing aggressive selling pressure. “Now as long as it is below the 15,500 zone, we can expect lower levels of 15,350 and 15,000 whereas resistance is faced near 15,735 and 15,888 zones. Market breadth is negative which indicates that the bears are dominating and facing resistance at higher levels,” said analyst Chandan Taparia.

“More than the 75 bps hike in rate, which was expected, it was the Fed chief’s comments and guidance that have calmed the markets, temporarily. Jerome Powell’s remarks that ‘We have the tools and resolve to achieve price stability’ reflects confidence in containing inflation. His guidance of 3.4% rate by end of 2022 and 3.8% terminal rate in 2023 reflect the determination to fight inflation. However, currently the unknown factor is whether the rising rates will tip the US economy into recession,” said another analyst VK Vijayakumar. — With PTI inputs

Investors poorer by Rs 15.74 L cr in 5 days

• Equity investors became poorer by Rs 15.74 lakh crore in five days of market fall
• In five trading days, the Sensex has dived 3,824.49 points or 6.91%

Re up 12p to 78.10/$

The rupee recovered from its record low to close 12 paise higher at 78.10 against the USD on Thursday

SENSEX TANKS 1,045.60 POINTS

BIGGEST HIKE BY FED IN 28 YRS

CLOSES AT 51,495.79

• Nifty plunged 331.55 points or 2.11% to close at 15,360.60
• All major stocks closed in the red, led by Tata Steel, Tech Mahindra & Bharti Airtel