Will Indian stock market see further sell-off amid delay in US Fed rate cuts? Here's what experts say
Also Read: US Fed Chair Jerome Powell signals delayed interest rate cuts amid high inflation While the recent U.S. retail sales also jumped 0.7% month-over-month in March 2024, surpassing forecasts of 0.3%, showing that consumers continued to spend at a faster pace than anticipated despite borrowing costs at a 23-year high. Since March 2022, the U.S.
central bank has raised its policy rate by 525 basis points to the current 5.25% to 5.50% range. Market experts suggest that Powell's remarks could trigger additional selling pressure in equities, particularly in emerging markets like India. The delay in rate cuts has unsettled investors, especially after the US March inflation data was released last week, prompting a sharp sell-off in Indian equities.
In addition to the delayed in the rate cuts, escalating tensions in the Middle East, a surge in US bond yields, the rupee hitting new lows against the US dollar, and selling pressure from foreign institutional investors (FIIs) have all added to the downward pressure on Indian stocks. Amid this backdrop, both benchmark indices - Nifty 50 and Sensex - have experienced declines of 2.65% and 2.79%, respectively, in the last three sessions. Among the hardest hit in this market downturn were IT stocks, witnessing declines ranging from 2% to 6%.
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