Stocks

Sensex plunges 202 points as Fed keeps rate hike in play

Our Bureau |Agencies | | Updated on: Dec 06, 2021

sensex

The Sensex and the Nifty fell for a fourth consecutive session on Thursday, recording their lowest close in little over two weeks, as the US Federal Reserve revived market expectations that it may yet raise interest rates by the end of the year.

The Fed had kept rates unchanged as expected on Wednesday, but surprised investors with a direct reference putting in play a rate hike at its next policy meeting in December.

Sentiment was also subdued ahead of the expiry of October derivatives contracts at the end of the session, while caution ahead of earnings also weighed on the market.

"I think until the first week of November, we will play out the result seasons, and thereafter the market will find some stability," said Deven Choksey, managing director at KR Choksey Securities.

The 30-share BSE index Sensex ended lower by 201.62 points or 0.75 per cent at 26,838.14 and the 50-share NSE index Nifty ended down by 59.45 points or 0.73 per cent at 8,111.75.

Barring Consumer Durables and Auto, all other BSE sectoral indices ended in the red. Among them, PSU index fell the most by 1.39 per cent, followed by Power 1.11 per cent, Bankex 1.10 per cent and Capital Goods 1.09 per cent. On the other hand, Consumer Durables index was up 0.39 per cent and Auto 0.04 per cent.

Top five Sensex gainers were Dr Reddy's (+2.59%), Vedanta (1.71%), Tata Motors (+1.36%), Lupin (+0.53%) and Reliance (+0.46%), while the major losers were BHEL (-4.38%), Axis Bank (-2.81%), Sun Pharma (-2.36%), Coal India (-2.3%) and SBIN (-2.02%).

The US Federal Open Market Committee while holding interest rates at the same levels of 0-0.25 per cent said: "To support continued progress towards maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 per cent target range for the federal funds rate remains appropriate. In determining whether it will be appropriate to raise the target range at its next meeting, the Committee will assess progress -- both realised and expected -- towards its objectives of maximum employment and 2 per cent inflation. This assessment will take into account a wide range of information, including measures of labour market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labour market and is reasonably confident that inflation will move back to its 2 per cent objective over the medium term."

Published on October 29, 2015
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you