Equity benchmarks fell on Wednesday, stalling a two-day winning streak, tracking a sea of red in Asian bourses following a deep sell-off in Wall Street stocks as investors braced for the US Federal Reserve’s aggressive rate hike later in the day.
The 30-share BSE Sensex index fell over 200 points, and the broader NSE Nifty-50 index opened in the red.
Stocks in Asia sank following a fall in shares on Wall Street, which pushed the S&P 500 down over 1 per cent overnight, even as futures indicated a slightly higher open on Wednesday.
The risk from a steep Fed rate hike had markets on the edge, with futures pricing in a 81 per cent likelihood of another 75-basis-point increase and a 19 per cent likelihood of a full percentage point increase.
Markets are “seemingly well positioned for a 75bps hike alongside a hawkish update” from the Fed, Taylor Nugent, a Markets Economist at National Australia Bank in Sydney, wrote in a client note.
“The post meeting commentary and the updated dots will be key,” said Mr Nugent, adding that the NAB was looking for a policy rate of “something like 4 per cent” at the end of this year with no rate cuts expected until 2024.