Fed rate hike fears return to spook markets

However, experts continue to be hopeful for growth in the near term, believing the market has lost steam as a natural response to the robust rally since demonetization Concerns over capital

outflows in the event of another rate hike by the US and dismal earnings data by India Inc dragged the stock market down. On Wednesday, the BSE Sensex tumbled 183.75 points, or 0.65%, to

close at 28155.56, while Nifty dropped 67.60 points, or 0.77% to close at 8724.70 18. Out of the 30-share Sensex pack, 18 scrips ended lower. Among stocks that plummeted on Wednesday are

Tata Motors, which fell 10.32% and Sun Pharma 4.25% after reporting fall in net profits. Concerns over capital outflows from emerging economies were triggered after US Federal Reserve (Fed)

chair Janet Yellen spoke of a likelihood of rate hike next month to contain inflation. This along with dismal earnings added to Dalal Street's negative breadth on Wednesday, experts

said. The fall in Sun Pharma's stock price wiped out Rs 6,637.16 crore from the company's market valuation. However, experts continue to be hopeful for growth in the near term,

believing the market has lost steam as a natural response to the robust rally since demonetization. "It is difficult to pinpoint a reason for market's decline on a day-to-day

basis. Since demonetization, market rally has been quite aggressive and Wednesday's fall is only a natural correction. Company earnings do not have enough power to alter the course of

the market. Disappointing earnings data of one or two companies alone cannot drag the entire market down," Raamdeo Agrawal, co-founder, Motilal Oswal Financial Services Ltd, told DNA

Money. Tata Steel (2.57%), Adani Ports (2.09%), Hero MotoCorp (1.99%), ICICI Bank (1.49%), Maruti (1.32%), Dr Reddy's (1.27%), NTPC (1.08%) and Bharti Airtel (0.99%) were major

laggards. "Results of Sun Pharma and Tata Motors weighed on benchmark indices today contributing to the day's losses. Fed chair Janet Yellen's announcement on further rate

hikes on Tuesday signalling strengthening economic prospects in the US led to an upsurge in the dollar index which took a toll on markets. Going forward, Fed stance is likely to determine

the market trajectory, among other factors," Dipen Shah, senior vice-president - PCG Research, Kotak Securities, said.