Today a sharp fall was seen in the Indian market, both Nifty 50 and Sensex were down almost 1.7%. The inflation level in the US is at its 40-year high, due to which the expectation of a rate hike by the US fed is increasing, Reuters reported.
St. Louis Federal Reserve President James Bullard said on Thursday that according to him, the rate should be increased from 1% to 1.25% in the next 3 meetings of the US fed. He said that by July, he is expecting a rate hike of up to 100 basis points.
Due to all these developments, if the US looks at the 10 year G Sec yield, then it has also crossed 2% which indicates that the overall market also believes that the US fed can now rate hike aggressively.
In such a situation, there are chances of big foreign institutions and investors’ capital outflowing from an emerging market like India and hence even today there was a decline in the Indian stock market.