Equity markets around the world continued to slide on Thursday after the US Federal Reserve indicated that it would continue in the interest rate hike path set for the coming year despite signs of slowing global economic growth.
The American central bank on Wednesday had hiked the interest rates by 25 basis points, but its less than expected dovish outlook raised worries for market participants and major indices fell to their two-year lows as investors fled to the safety of government debt.
Shares of European markets fell 0.9 percent with indices in Germany, Britain and France hitting their lowest since 2016. Indices in Japan and South Korea fell as much as 20 percent from their recent highs, reported the international press agency Agence France-Presse. A similar movement was observed in Shanghai and Hong Kong. MSCI's global equity index was at its lowest since May 2017, falling 0.8 percent as it records its fifth straight day of losses.
Despite the bearish sentiments in markets around the world, India's Sensex and Nifty recovered better than its Asian peers. Nifty 50 was down by 0.14 percent only at closing time on Thursday.
However, there are a few factors that helped the Indian markets cheer. A decline in international oil prices in the past few days that would help a heavily import-dependent country like India to ease its current account deficit. A stronger rupee and recent measures taken by the government and the RBI to infuse liquidity after the IL&FS issue have all contributed to the positive sentiment.
These factors can not make you ignore the fact that Indian stock market indices have shown quite some resilience in the sudden negative events in the recent past that are country specific. Be it Prime Minister Narendra Modi's party's loss in the recent state assembly elections or the resignation of former RBI governor Urjit Patel, any unusual volatility was not observed.
Earlier, movements in the Indian markets were reflective of that in the US. The trend seems to have now been changed.