Mumbai: A statement by Jerome Powell, Chair of the US Central Bank, the Federal Reserve, rocked the market throughout the world after he was clearly shown on Wednesday night that the Fed would raise interest rates in March, ending the market support program almost two years through nearing zero tribes Flowers and buy bonds from the market.
As a result, Asia opened deep in red, Sensex opened weakly and fell more than 1,400 points in the middle of the session, but Bargain Hunting at the end of the trade helped him close to 581 points, or 1%, at 57,277.
IT stocks, along with Reliance Industries, the most contribution for that day slid while purchases in tender banking shares falling to some extent, data that BSE shows.
Along with stocks, bonds and rupiah are also affected as a result of the Fed statement.
Indian government bonds also witnessed the sale with the benchmark yield almost reached 6.75%, a two-year peak, while Rupee weakened below the 75-to-the-dollar figure because of concerns about the withdrawal of foreign funds from the stock market growing.
Data from BSE shows that on Thursday, foreign funds are clean at RS 6267 Crore.
Since talks about the US Fed withdrawal of the bond purchasing program has been going on for a while, foreign portfolio investors (FPIS) have taken money from India, market participants say.
As a result, so far on the month, Net Selling by foreign funds from the stock market is almost Rs 29,000 Crore (almost $ 3.9 billion), combined data from BSE and CDSL shows.
This is a net monthly highest withdrawal from the FPIS from equity since March 2020, when at the beginning of Covid Pandemic, Sensex has drunk more than 40% in less than three weeks.
According to S Ranganathan, research head, LKP Securities, even as the US Fed left the benchmark interest rate near zero, Hawkish comments quickly drifted profits in the global market, which leads to the opening of the crack-down on the index back home.
“As FPI continues to profit from India (shares), the value of shares makes a comeback with Bank Index PSU rally more than 5% (Thursday afternoon), supported by auto shares, for the smart recovery stage,” RanganTan wrote in a market record.
That day sliding also left poor investors around Rs 2.8 Crore Lakh with Capitalization of BSE markets now at RS 263.2 Crore Lakh, official data showed.
In the government bond market, the results of the 10-year benchmark hit almost 6.75%.
In this background, the bond dealer said that the government Hospital is planned 24,000-crore bond auction on Friday will be interesting to pay attention.
On the one hand, buyers of bonds will prefer to buy bonds at a lower price (which will boost the yield), while the RBI may be more inclined to keep the results below the check.
On the Forex market, Rupee slid 29 Paise to close the 75-per-dollar sign, at 75.07.