Sensex Tumbles 323 Points as Global Markets Reel on Sober Federal Reserve Outlook

Equity indices snapped a two-session rising streak to close with sharp losses on Thursday, in lockstep with global markets which recoiled after sobering economic assessment by the US Federal Reserve. A weakening rupee and lack of fresh buying triggers further weighed on market mood, traders said.

The 30-share BSE Sensex opened lower and stayed in the negative zone throughout the session. It finally finished at 38,979.85, down by 323 points or 0.82 per cent.Similarly, the NSE Nifty shed 88.45 points or 0.76 per cent to close at 11,516.10.

Bajaj Finserv was the top laggard in the Sensex pack, slipping 2.23 per cent, followed by PowerGrid, L&T, TCS, ICICI Bank, Kotak Bank, Tata Steel and Bajaj Finance. On the other hand, HCL Tech, Infosys and Maruti finished with gains of up to 2.36 per cent.

Global equities swooned after the US Federal Reserve did not unveil any additional stimulus measures at its policy meet, even though it hinted at the key interest rate staying close to zero at least through 2023. Federal Reserve Chairman Jerome Powell also said the economic outlook is “highly uncertain”, stoking fears of more pain in store for businesses.

“Indian markets reacted in sync with global markets, after the US Fed reserve failed to keep up with the expectations of the investors. In spite of pledging to keep interest rates low, markets were disappointed on the lack of further inputs or immediate stimulus measures.

“Continued border tensions with China also worried Indian markets. Markets are expected to remain uncertain and investors advised to remain cautious,” said Vinod Nair, Head of Research at Geojit Financial Services.

BSE realty, metal, bankex, capital goods, finance, power and utilities indices dropped as much as 1.87 per cent, while healthcare, IT and teck closed in the green. Broader BSE mid-cap and small-cap indices fell up to 0.53 per cent.

Shares of Happiest Minds Technologies made a stellar debut on the bourses, listing with a premium of over 111 per cent against its issue price of Rs 166. The stock finally finished at Rs 371, up 123.49 per cent over the issue price. Bourses in Shanghai, Hong Kong, Seoul and Tokyo ended with significant losses.

Stock exchanges in Europe too opened on a negative note. Meanwhile, global oil benchmark Brent crude was trading 0.26 per cent lower at USD 42.11 per barrel. The rupee depreciated 14 paise to close at 73.66 against the US dollar.