US Fed rate hike fears rattle bourses

Mumbai: Declining for the third straight session, equity benchmark Sensex tumbled over 575 points on Thursday, tracking heavy losses in index-heavyweights HDFC twins, TCS, and Reliance Industries (RIL) amid a selloff in global equity markets. US Fed meeting minutes indication to a faster than expected policy rate hike to fight elevated inflation and surging oil prices amid uncertainties on the geopolitical front further weighed on sentiment, traders said. Investors also await cues from the RBI policy meeting outcome, which will be announced on April 8.

The 30-share gauge slumped 575.46 points or 0.97 per cent to settle at 59,034.95. During the day, it plunged 633.06 points or 1.06 per cent to 58,977.35. The broader Nifty-50 also declined 168.10 points or 0.94 per cent to close at 17,639.55. "Negative sentiment continued for the third straight session as the US Fed's hawkish stance has raised concerns of steeper interest rate hikes going ahead, while investors also trimmed their positions ahead of RBI policy, although most of the experts believe the MPC may maintain status quo on policy rates. The fall was largely due to profit-taking in Reliance Industries and other energy stocks amid volatility in global crude oil prices," Shrikant Chouhan, head (equity research-retail), Kotak Securities Ltd, said.

Deepak Jasani, head (retail research), HDFC Securities, noted that "Asian shares retreated on Thursday, in line with the overnight global selloff. European shares on Thursday recovered from a selloff, even though risks from a hawkish Federal Reserve and Washington's new sanctions on Russia kept investors on edge."

"If announcements are in-line with market expectations, like rates being unchanged, inflation forecast moderately increased and robust economic outlook maintained, then the market will trade positively considering corrections during the week and falling crude prices or else challenges will prevail," Vinod Nair, head (research) at Geojit Financial Services.