Sensex, Nifty Fall Sharply As Fed Jitters Hit Global Markets Again

BSE Sensex and Nifty were down nearly 0.7 per cent today amid weak global cues on growing expectations the Federal Reserve would raise interest rates earlier than expected. The Sensex was down 176 points at 27,089 while Nifty declined 51 points to 8,101.. Economists at the San Francisco Fed shocked global markets by publishing a paper saying investors expects a slower rate hikes than the U.S. policymakers themselves expect. Predictably, the research ramped up expectations the Fed could signal an earlier-than-expected hike in rates at their policy-setting meeting on September 16-17. "The markets had probably become too complacent about the Fed keeping rates low for a long time because of the Ukraine crisis and so on," said Makoto Noji, senior strategist at SMBC Nikko Securities. The rupee also tracked losses in equity markets and the dollar's rise against other currencies. The dollar was hovering around 14-month highs against a basket of major currencies. The rupee weakened to 60.90/dollar today vs its previous close of 60.60. Rohit Srivastava, fund manager at Sharekhan, says the rupee levels remain key for Indian markets as the selling pressure in European currencies could spread to emerging currencies. However, broader markets showed gains with the BSE midcap and smallcap indices trading with 0.30 per cent and 0.70 per cent higher. Among frontline stocks, ITC fell 1.7 per cent on concerns about tougher tobacco regulations. A newspaper report citing sources said that the government is considering a ban on the sale of loose cigarettes among other measures. Among other major Nifty losers, BPCL, JSPL, Infosys and Cairn India fell between 1.5 per cent and 2.5 per cent. Among gainers, IDFC, Bajaj Auto and Tata Power were up over 1.5 per cent. ICICI Bank rose nearly 1.3 per cent after India's top private sector lender by assets announced a five-for-one stock split. In other global markets, Asian stock markets fell on Wednesday following Wall Street's decline and weak Japanese machinery orders while investors mulled the timing of a possible US interest rate hike. Most of the European markets were also lower today in early trade. (With Agency Inputs)

Sensex, Nifty Fall Sharply As Fed Jitters Hit Global Markets Again

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