America’s Central Bank Federal Reserve has not made any change in the interest rates but has indicated to increase it by 25 basis points. It is expected to be reduced by 50 bps next year. Due to this, there is a possibility of pressure in the market for some time. Apoorva Seth of Samco Securities said that high interest rates are not good for the market. Yields and markets cannot remain high for long. One of these has to come down. The Fed is adamant on its insistence, so the markets will have to come down first.
Why is the decline coming?
There are many reasons for the decline in the market. Inflation is still very high in America and there is no possibility of it coming down in the near future. The yield on Treasury notes with a two-year maturity has reached a 17-year high. Similarly, the 10 year yield is also at its peak in 16 years. The dollar index has reached 105.59, its highest level since March 19. The price of crude oil has increased significantly recently and it is expected to reach $ 100 per barrel soon.
Nifty is trading near lifetime high. In such a situation, there is a possibility of decline in midcap and smallcap. Foreign investors have sold heavily in September. According to NSDL data, FIIs have sold Rs 5,213 crore so far this month. Nifty formed a long bear candle with upper shadow on the daily chart today. With this the index formed a short-term top reversal pattern.