Below Market commentary by Dr. Joseph Thomas, Head of Research, Emkay Wealth Management

“The equity markets traded lower mainly tracking the developments in overseas markets especially the US. The Fed rate hike and the stance that rate hikes would continue till inflation is contained displayed in ample measure an aggressive and hawkish Fed. Even if its costs a little bit of economic growth so be it,  has been the stated approach. This time around the Fed policy comes with a projection of lower growth and gradually rising unemployment. This was to the dismay of many a market participant who believes that this is a confirmation of the US gradually entering a period of declining economic growth, a growth that is already slowing. This has affected the equity markets, and this has sent its reverberations across the world. More than anything else, it is the expectations of higher interest rates and lower liquidity that is at the back of the mind of many an investor. High inflation, widening trade deficit, weakening currencies and a likely slowdown in growth may entrap some of the emerging market economies. The policy from the RBI is expected in the next few days, and the anchoring of the policy will be keenly watched to see its implications for the market at a time when the economy is witnessing high credit growth and a shortfall money market liquidity.” 

Above views are of the author and not of the website kindly read disclaimer