ANI
23 Mar 2023, 16:57 GMT+10
New Delhi [India], March 23 (ANI): Indian stocks settled lower on Thursday in line with weakness in the US markets, which declined sharply overnight as the US Federal Reserve went ahead with its further monetary policy tightening to bring down inflation to its target even as volatility in the banking system continued due to recent collapse of some banks.
Both Sensex and Nifty closed the day 0.5 per cent lower each; with majority of the Nifty sectoral indices trading in the red.
During the day, the Sensex and Nifty for a while pared some of its early losses but could not hold on to it.
Monetary policy tightening in the form of interest rate hikes in the advanced economies is detrimental for India, and other developing countries, as investments tend to shift to those advanced countries where returns on investments are reasonable and stable.
"Although the Fed's decision to increase rates by 25 basis points was in line with expectations, concerns were raised by the U.S. Treasury Secretary's statement that blanket insurance for all deposits was not being considered," said Vinod Nair, Head of Research at Geojit Financial Services.
The US monetary policy committee, seeking to achieve maximum employment and inflation at the rate of 2 per cent over the longer run, hiked the key interest rate by 25 basis points to 4.75-5.0 per cent.
After the latest hike, the committee anticipates that some "additional policy firming" may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 per cent over time.
Going ahead, the Committee's assessments will take into account a wide range of information, including readings on labour market conditions, inflation pressures and inflation expectations, and financial and international developments.
Consumer inflation in the US moderated in February to 6.0 per cent from 6.4 per cent the previous month, but the numbers are still way above the 2 per cent target. It was at 6.5 per cent in December, and 7.1 per cent the month before.
The US central bank's policy rate, which is now in a target range of 4.75-5.0 per cent, the highest in 15 years, and notably, it was near zero in the early part of 2022. Raising interest rates typically help in cooling demand in the economy and thus helps in managing inflation.
Despite inflation moderating in recent months, the process of getting it back down to 2 per cent is still a long way away and the path was likely to be bumpy, US Federal Reserve chair Jerome Powell cautioned. (ANI)Get a daily dose of Mexico Star news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Mexico Star.
More InformationNEW DELHI, India: Birkenstock is stepping up its efforts to protect its iconic sandals in India, as local legal representatives conducted...
(250710) -- LATAKIA (SYRIA), July 10, 2025 (Xinhua) -- Photo taken with a mobile phone on July 10, 2025 shows burned trees in province...
Agartala (Tripura) [India], July 10 (ANI): Heavy and continuous rainfall across Tripura has triggered severe flooding in South Tripura...
Dispur (Assam) [India], July 10 (ANI): The Assam cabinet on Thursday approved the proposal to enhance the remuneration of Gaon Pradhans...
Shimla (Himachal Pradesh) [India], July 10 (ANI): Over the past nine days, torrential monsoon rains have wreaked widespread devastation...
Kingston [Jamaica], July 10 (ANI): As Mitchell Starc gears up to become just the second Australian fast bowler after Glenn McGrath...
WASHINGTON, D.C.: Travelers at U.S. airports will no longer need to remove their shoes during security screenings, Department of Homeland...
WASHINGTON, D.C.: An elaborate impersonation scheme involving artificial intelligence targeted senior U.S. and foreign officials in...
SLUBICE, Poland: Poland reinstated border controls with Germany and Lithuania on July 7, following Germany's earlier reintroduction...
WASHINGTON, D.C.: After months of warnings from former federal officials and weather experts, the deadly flash floods that struck the...
MOSCOW, Russia: Just hours after his sudden dismissal by President Vladimir Putin, Russia's former transport minister, Roman Starovoit,...
DHARAMSHALA, India: The Dalai Lama turned 90 on July 6, celebrated by thousands of followers in the Himalayan town of Dharamshala,...