The Sensex slipped below the 63,000-mark to end at 62,917.63, down 310.88 points or 0.49% from the previous close. The Nifty fell 67.80 points or 0.36% to settle at 18,688.10. The broader markets resisted selling pressure and closed Thursday’s session in the green.
“The Street got a ‘very hawkish’ pause instead of a ‘hawkish’ pause,” said David Russell, vice president of market intelligence at TradeStation. “The Fed created more room to crush inflation but what this essentially means is it raises the significance of each incremental economic data.”
Fed Chair Jerome Powell dashed hopes of any reversal in the rate hike cycle and said rate cuts were a couple of years away until “inflation came down meaningfully and significantly”.
TradeStation’s Russell said more encouraging data like last week’s CPI and PPI could let traders look past the Fed’s tough talk.
On Thursday, foreign portfolio investors were undeterred by the outcome of the US Fed’s two-day policy meeting. Overseas funds were net buyers in the cash segment to the tune of ₹3,085.51 crore – buying for the third straight session. Domestic institutional investors were net sellers worth ₹297.88 crore, showed provisional data from the stock exchanges.
The mood in Asian markets was mixed but mostly bearish as traders digested the Fed’s latest decision that left the key borrowing rate unchanged at 5%-5.25% but are now forecasted to go as high as 5.6% before the end of 2023.The “dot plot” – a statistical chart plotting expectations of each FOMC individual member – was the surprise element of the Fed meeting that indicated rates will increase and stay elevated for longer.
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