After a day of Recovery, Sensex and Nifty are again in Red

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After a day of Recovery, Sensex and Nifty are again in Red
22 Apr 2022
6 min read

News Synopsis

On April 22, after Jerome Powell, the Chairman of the United States Federal Reserve signaled that the US central bank would work aggressively to tackle inflation, Global Stock markets remain weak. This indicates that the United States is expected to raise the interest rates more aggressively, which is why Mr. Powell also suggested a 50 basis points rate increase was seen on the table in the month of May this year. Due to record inflation, the US central bank has been looking to stop measures for the economic stimulus that started after the pandemic.

One of the ways to do this is by increasing interest rates. The idea behind raising interest rates is that it will make borrowing costs higher, which eventually can slow down inflation and curb demand. The increase in the US interest rates does not went well for the Indian bourses, as it led to foreign investors pulling money out of Indian markets. As a result, Indian Stock markets have been in the red for many days now. Foreign Institutional Investors (FIIs) have been selling a huge amount of equities i.e., ₹1.21 lakh crore so far in 2022 as against ₹25,750 crore buying of equities in 2021.