Stock market today: BSE Sensex and Nifty50, the Indian equity benchmark indices, tanked in opening trade on Thursday after US Federal Reserve’s hawkish commentary. While BSE Sensex went below 80,000, Nifty50 also plunged below 24,000. At 9:17 AM, BSE Sensex was trading at 79,287.77, down 894 points or 1.12%. Nifty50 was at 23,917.00, down 282 points or 1.16%.
The Indian market is witnessing a decline in the early holiday season rally, with a stronger impact in India versus developed markets due to the dollar’s swift rise. Trading today will be influenced by the US Federal Reserve’s latest decision.
“Market sentiment remains cautious ahead of potential policy and tariff shifts from the incoming US administration. This caution is further influenced by India’s premium valuation, which is significantly above the current earnings growth trajectory that has slowed over the last two quarters,” said Vinod Nair, Head of Research, Geojit Financial Services.
US indices recorded significant losses after the US Federal Reserve’s rate cut decision. All three major indices recorded their largest single-day losses in months. This followed the Federal Reserve’s decision to reduce interest rates by 0.25%, whilst their future projections indicated a more conservative approach to rate reductions in the coming year.
Thursday witnessed Asian equities falling, following the substantial losses in US markets, after the Federal Reserve reduced expectations for interest rate reductions next year.
The dollar approached a two-year high on Thursday following the Federal Reserve’s indication of reduced rate cuts in 2025. Simultaneously, the yen decreased to its lowest point in a month before the Bank of Japan’s (BOJ) policy announcement later in the day.
Gold prices remained near their lowest point in a month on Thursday after the U.S. Federal Reserve suggested a deceleration in monetary policy easing for the next year, strengthening both the dollar and Treasury yields.
Foreign portfolio investors shifted to net selling position with outflows of Rs 1,316 crore on Wednesday. Domestic institutional investors offloaded equities valued at Rs 4084 crore.
Foreign institutional investors’ net short positions rose from Rs 91,098 crore on Tuesday to Rs 1.01 lakh crore on Wednesday.