Fed sneezes, Indian markets catch cold

Falling streak Nifty and Sensex closed 1.02% and 1.2% lower, after the Fed decision to slow rate cuts rattled stocks worldwide.

- Ram Sahgal

MUMBAI: Desperation swept over global markets on Thursday after the US Federal Reserve indicated a slower easing of interest rates, sending Indian stocks lower for the fourth day in a row. Markets now await the onset of the annual Santa Claus rally, when stocks tend to rise during the Christmas-New Year holiday season.

While reducing the US policy rate by 25 basis points, the Fed signaled it may reduce rates twice in 2025 instead of four times as projected earlier. The Nifty and Sensex fell in line with global peers as foreign investors dumped domestic bluechip stocks. The cut in Fed's rate forecast strengthened the dollar, dragging the rupee below 85 per dollar to a new low.

The Nifty closed below 24,000, settling 1.02% lower at 23951.70, while the Sensex closed below 80,000, shedding 1.2% to 79218.05. The day saw intense selling in banks, technology, and oil and gas, heavyweight sectors where foreign portfolio investors (FPIs) have a sizeable presence.

The market undertone remains bearish, with domestic indices likely to take cues from their global peers, though analysts don't rule out a bounce after the straight four days of straight decline.