Fed's move – not to print any more money but to buy long-term bonds by selling short-term bonds will pull interest rates of long-term bonds much lower because the key policy interest rates in US have already kept to near zero. Fed's motive behind such step is to make long-dated treasury securities less attractive so that investors rush behind riskier assets of the economy which will in turn boost their economic activity.

Fed's $600 billion inject or Quantitative Easing which announced in November 2010 and accomplished in June 2011 hasn't had any stimulative effect on the economy. So, Fed decided to twist their bond-buying programme which will bend its $2.85 trillion balance sheet heavily with long-term maturity bonds.

In US, the yield on the 30-year Treasury notes fell from 3.24% to 2.99%, close to December 2008 fall. While, 10-year bonds also dropped to 1.86%.

But the concern is how this is going to affect India?

Fed's 'operation twist' has already haloed alarm bells in Asian economies with the US markets ended weak and Asian economies opened lower.

The Dow Jones Industrial Average (US) dropped 2.49% in closing trade, while the S&P 500 plummeted 2.94% and the Nasdaq slid 2.01%.

In Asian zone, China's Shanghai was seen down by 1.74%, Japan's Nikkei 225 by 2.07% and Hong Kong's Hang Seng Index by 4.08%.

Indian Markets also opened lower with the benchmark Sensex opened low at 16,827.85 and was seen at 16,743.25, down by 324.40 points or 1.91%.

NSE Nifty opened low at 5,055.05 and was seen down at 5,032 by 100 points.

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