Sensex slumps 1.1% ahead of U.S. Fed meet

Indian equity markets slumped by more than 1% following nervousness ahead of the U.S. Fed policy meeting on Thursday.

An accommodative policy could stabilise global markets, analysts said, adding that the rise in COVID-19 cases fuelled selling pressure.

Extending losses to the fourth session in a row, the S&P BSE Sensex fell 1.12% or 562 points to 49,801.62 on broad-based selling. PSU and banking stocks were most impacted. The NSE Nifty 50 too dipped 1.27% to 14,721.30.

“The corrective phase continues for our markets and post some consolidation, the broader markets too were seen under pressure ahead of the U.S. Fed Policy. The last-hour correction in the banking index resulted in further pressure; and lack of buying interest is now… resulting in a price-wise correction as well,” Ruchit Jain, senior analyst, Technical and Derivatives, Angel Broking, said.

“Nifty has ended at around 14,700 which is a crucial point now and a breach of this could then lead to a continuation of price correction towards 14,500. On the flip side, 14,850-14,900 becomes the immediate hurdle now,” he added.

Ajit Mishra, VP, Research, Religare Broking, said, “Markets would first react to the Fed meet outcome in early trade on Thursday. “We maintain our cautious view and suggest keeping the long positions hedged.”

He said a decline below 14,600 in Nifty would pave the way for a further slide. “We’re seeing profit-taking across the board except [for] IT and FMCG; so plan your trades accordingly,” he added.