Bloody Monday: Indian stocks plummet; US Fed Chair's aggressive monetary policy stance spooks markets

At 9.19 a.m., Sensex traded at 57,524.27per cent, down 1,309.60 points or 2.23 per cent, whereas Nifty traded at 17,181.90 points, down 377.00 points or 2.15 per cent.

ANIUpdated: Monday, August 29, 2022, 09:48 AM IST
article-image
Bloodbath in Indian stocks; US Fed Chair's aggressive monetary policy stance spooks markets | Photo: Pixabay

New Delhi: Indian stocks declined sharply on Monday morning tracking negative cues from global benchmarks as stocks in the US plummeted after Federal Reserve Chair Jerome Powell said the central bank won't back off in its fight against rising inflation.

At 9.19 a.m., Sensex traded at 57,524.27per cent, down 1,309.60 points or 2.23 per cent, whereas Nifty traded at 17,181.90 points, down 377.00 points or 2.15 per cent.

All Nifty 50 traded deeply in the red, National Stock Exchange data showed.

Powell said in a speech to the central banking conference in Jackson Hole, Wyoming that the US economy will need tight monetary policy "for some time" before inflation is under control.

The Federal Open Market Committee's (FOMC) focus right now is to bring inflation back down to 2 percent target.

"Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses," Powell said at the conference.

"These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," Powell added.

In the backdrop of an over four-decade high inflation, the US Federal Open Market Committee in late July raised its key policy interest rate by 75 basis points to 2.25-2.50 per cent, anticipating that the increase in the interest rates will be "appropriate".

Hiking interest rates typically cool demand in the economy, thereby putting a brake on the inflation rate.

Other major Asian shares too slid on Monday on account of mounting risk of more aggressive rate hikes in the US, said Mohit Nigam, Head - PMS, Hem Securities.

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Mumbai: ED freezes Rs 21.14 cr of forex company OctaFX in illegal trading case

Mumbai: ED freezes Rs 21.14 cr of forex company OctaFX in illegal trading case

Tokens are set to replace card info for online payments from October 1, here’s how to adapt to it

Tokens are set to replace card info for online payments from October 1, here’s how to adapt to it

Indian government orders ban on 67 porn sites in a country with the 6th highest viewership

Indian government orders ban on 67 porn sites in a country with the 6th highest viewership

Startups pay engineers more than Infosys and Wipro but layoffs, fund crunch blemish rosy picture

Startups pay engineers more than Infosys and Wipro but layoffs, fund crunch blemish rosy picture

Festive bonanza expects to boost real estate demand

Festive bonanza expects to boost real estate demand