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Below is quote on Morning market 05 May  2022 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"RBI's decision to raise repo rate and CRR by 40bp and 50bp respectively came as a surprise since the decision was taken by the MPC in an unscheduled meeting indicating that the central bank was behind the curve. The market reaction with a 1300 point cut in the Sensex reflected concern regarding high inflation and the potential impact  of high interest rate on growth and corporate earnings.

On the other hand, the Fed's clear communication triggered a sharp relief rally in the US market. There are three positive takeaways from the Fed's announcement. One, there won't be a 75 % rate hike and the market can expect a 50bp rate hike in the next two meetings also. Two, there is some evidence that inflation may have peaked. Three, the US economy continues to be strong with household spending, businesses and labour markets in good shape.

It remains to be seen whether the relief rally will sustain"

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