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Mumbai: Indian equity markets fell over 1% on Friday dragged by heavyweights and financial stocks amid indications that the US Federal Reserve may speed up the pace of policy reversal.

The benchmark Sensex was currently down 0.8% at 51,930 points, while Nifty declined 1% to 15,560 points.

With covid cases declining globally and the economy opening up in many countries, the Fed has indicated that it will start reversing its easy money policy at a faster pace than previously estimated.

Indication of slight hawkish policy in the latest FOMC meeting has weighed on sentiments, though this was broadly being anticipated, said Binod Modi, head Strategy at Reliance Securities.

"The US Fed’s hawkish tone didn’t go well with equity investors across the globe, and we might see the overhang for a session or two. Going ahead, the focus would shift back to fundamentals and domestic factors viz. pace of vaccination drive, reopening by states, etc. Meanwhile, we reiterate our advice of keeping a check on naked leveraged positions and let the markets stabilize", said Ajit Mishra, VP - Research, Religare Broking.

Analysts said more than 100% improvement in advance tax/direct tax collections in 1QFY22 so far is a positive for the markets as it indicates sustainable corporate earnings in coming quarters along with strong financial resources for the government to maintain budgeted fiscal deficit. Further, ease of business curbs by states, led by sharp decline in covid-19 positivity rates and reduction in daily caseload, continues to offer comfort to investors, analysts added.

Investors will be watching out for the progress on daily caseload, vaccination ramp-up and monsoon progress in the near term for further direction.


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