The US Fed is widely expected to raise interest rates by 75 basis points when it announces the policy meeting outcome late Wednesday in a bid to tackle rising inflation. Investors will also be looking at the commentary from the Fed for further cues.
The Sensex ended down 497.73 points, or 0.89%, at 55,268 and Nifty ended down 147.15 points, or 0.88%, at 16,483. The IT index ended down nearly 3% and was the worst performer among sector indices.
“Market participants at this point of time have discounted a 75bps rate hike but a 100bps rate hike could further strengthen the dollar against its major crosses,” said in a note to clients. “Recent inflation number suggests that the Fed could stick to a 75bps rate hike but cool-off in commodity prices from its recent highs could trim expectation of aggressive rate hike in the coming meeting.”
ended down 3.4% as the top laggard on the Sensex. , Dr Reddy’s Laboratories and ended down around 3% each. , and ended down nearly 2% each.