For the third consecutive session, Indian stock indices have experienced a selling trend, but they opened Friday’s trading session with slight gains. The Sensex showed a modest 0.1 percent increase, reaching 66,297.35 points, while the Nifty rose by 0.04 percent, reaching 19,750.45 points. However, over the course of this week, both indices have collectively declined by more than 2 percent.
This decline in Stocks was accentuated on Thursday when the US central bank, while maintaining its current interest rates during its September meeting, hinted at the possibility of future rate hikes as a measure to combat inflation. This message of a potentially more hawkish stance by the Federal Reserve has created a global atmosphere of risk aversion in equity markets, as noted by VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Furthermore, the financial markets have been influenced by rising global crude oil prices and the resulting strength of the US dollar. Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, mentioned that the market saw a 2.2 percent decrease over the last three days due to profit booking at higher levels. Uncertain global signals and consistent selling by Foreign Institutional Investors (FIIs) are expected to keep the markets under pressure in the short term.
As a result, it may be prudent to favor defensive sectors until the market stabilizes. It’s worth noting that Monday and Wednesday witnessed Indian stock indices in the red, with investors opting to take profits after the indices reached new highs the previous week. Additionally, Tuesday marked a market holiday in observance of Ganesh Chaturthi.
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