Sensex Plunges 1,300 Points, As Investors Worry over Rising Interest Rates

The Sensex lost 1,300 points in trade, as worries over rising bond yields and faster than expected interest rates rise in the US, spooked investors. The US Federal Reserve is set to conclude its 2-day policy meet on Wednesday, after which the direction on rise in interest rates would be made known.

The Nifty lost 382 points by noon and dropped to 17,275 points, while the Sensex was down 1300 points at 57,748 points.

Analysts are clearly expecting at least 4 interest rate hikes by the US Fed in 2022. A rise in global interest rates is not good for investors as it results in capital outflows from emerging market stocks into safe haven US Bonds. In fact, analysts expect the markets to witness an even sharper fall, particularly in IT and banking stocks.

In today's trade Infosys, TCS were among the heavyweight stocks that saw big losses. In fact, ICICI Bank and Reliance Industries, which reported a fantastic set of numbers also dropped around 1 to 2 per cent, despite good numbers.

Analysts expect a downside in the market, as domestic institutions may not be able to support a sustained fall in the market due to rising selling by FPIs. Investors are advised to act with caution, as a further downside is expected.