NEW DELHI: The stock market plunged more than 1,200 points on Thursday on rising interest rates and fears of an economic downturn in the United States. The BSE Sensex and NSE Nifty have been declining for the last several days. It was hoped from a good start today that investors can get some relief now. However, at one o’clock in the afternoon, the market was buzzing.
The Sensex has plunged sharply from the top. After this, the US stock market closed sharply yesterday. The local market also had a good start today due to the rally in the US market. The Sensex had touched 600 points in early trade. But by noon, the Sensex had lost more than 1,000 points. This means that the market has broken more than 1600 points from its peak today.
Stock market at a year low
The Sensex and Nifty started trading higher by more than 1-1 per cent. At 09:20 am, the Sensex was trading above 53 thousand points with an increase of more than 550 points. The Nifty jumped nearly 150 points to close at 15,850 points. At 01:00 pm, the Sensex fell more than 640 points (1.22 percent) to 51,900 points. Later the decline continued to increase. By 02:45, the Sensex had lost more than 1000 points. On the same pattern, the Nifty fell nearly 225 points to 15,465. This is the lowest level for the domestic market since July 2021.
The market was also very volatile yesterday
Earlier in the day, the stock market remained volatile throughout the day. At the close, the Sensex was down 152.18 points (0.29 per cent) at 52,541.39 and the Nifty was down 39.95 points (0.25 per cent) at 15,692.15. The Sensex was down 153.13 points at 52,693.57 on Tuesday and the Nifty was down 42.30 points at 15,732.10.
This is likely to lead to a recession
The US Federal Reserve on Wednesday announced a 0.75 per cent hike in interest rates to curb record-breaking inflation. This is the largest increase in interest rates in the US in almost three decades. Now interest rates in the US have risen to 1.50-1.75 percent. Currently, the retail inflation rate in the US is 8.6 percent, the highest in almost 40 years. The Federal Reserve wants to bring it into the 2 percent range. For this reason, the Federal Reserve is aggressively raising interest rates to reduce liquidity in the economy and curb demand. However, the risk of a recession on the economy will be exacerbated by the sharp rise in interest rates.
