Red Start For Sensex And Nifty, Fed Move And Global Tensions Spook Investors

Mumbai witnessed a sluggish start to the Indian equity markets on Thursday as the US Federal Reserve's rate hike and geopolitical tensions cast a shadow over investor sentiment. The BSE Sensex opened at 74,182.62, slipping 150 points or 0.21%, while the NSE Nifty 50 began the day at 23,195.25, down 22.35 points or 0.10%.

The Federal Reserve's decision to raise interest rates by 25 basis points, as expected by the market, fueled concerns about tighter financial conditions. Federal Reserve official Kevin Warsh highlighted that inflation had been persistently high for an extended period, and the central bank remained committed to achieving price stability.

With US 10-year Treasury yields nearing 5%, global equity markets faced additional challenges. The resilience of the American economy, coupled with strong corporate earnings, offered some solace to investors. However, the media and IT sectors faced headwinds, with Nifty Media plummeting nearly 1% in early trading, followed by a decline of 0.56% in Nifty IT and a 0.31% drop in Nifty Consumer Durables.

Among the indices, Nifty PSU Bank managed to gain 0.37%, Chemicals rose by 0.22%, Oil and Gas advanced 0.17%, and FMCG stocks increased by 0.13%. Domestic institutional investors, despite selling shares worth ₹2,000 crore in the preceding session, managed to provide support by purchasing shares worth nearly ₹3,900 crore.

Foreign institutional investors, however, continued to unwind their positions, offloading Indian equities worth about ₹5,610 crore over the past three sessions. Despite the market's downturn, Domestic Institutional Investors (DIIs) continued to pour in, investing ₹23,160 crore into Indian stocks amid ongoing global bond yield fluctuations, foreign fund flows, oil price volatility, and geopolitical uncertainties.