Sensex Crashes 1400 Points On Hawkish Comments From Jerome Powell

Global markets came crashing down and the Sensex and the Nifty followed, after hawkish comments by US Federal Reserve, Chairman, Jerome Powell.

The Fed Chairman warned that rising interest rates will cause "some pain" to the US Economy, saying that the pain would persist for sometime. The Sensex fell a huge 1207 points while the Nifty tumbled 347 points.

Shares in the Asia-Pacific traded lower on Monday following Fed Chairman Jerome Powell's speech at Jackson Hole on Friday. The Japanese Nikkei dropped almost 3%, while the South Korean Kospi, dropped 2.5%. In Australia, the S&P/ASX 200 fell 2%.

Among the biggest losers in trade were from the tech pack, including the likes of Tech mahindra, HCL Tech, Infosys, Wipro and TCS. There were no gainers from the Nifty in early trade.

"Fed Chairman at the Jackson Hole symposium mentioned that higher inflation is likely to bring some pain to household and businesses. He added that US economy would continue to show strong underlying momentum and also pledged that the central bank will "use our tools forcefully" to attack inflation.

"On interest rates the Fed will be dependent on the incoming economic data. Inflation continues to be the major concern for the Fed but in the process it could slower growth going ahead. US equities fell sharply while US dollar and 10 year yields rose in expectation of further tightening announcement by the Fed. Overall commentary is hawkish but Fed will be data dependent. Dollar will continue to get support at lower levels," says Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services.