Sensex Tanks Over 1,000 Points Following US Fed Rate Cut

The Sensex plummeted over 1,000 points after the US Fed's interest rate cut of 25 bps. Global market sell-offs and cautious Fed projections contributed to declines across Indian sectors, with tech stocks showing resilience amid widespread losses. Investors remain wary of prolonged volatility.

The Indian stock market experienced a significant plunge on Thursday morning as the Sensex tumbled 1,010 points, hitting 79,171, while the NSE Nifty fell 302 points to 23,895. The decline follows the US Federal Reserve's decision to reduce its benchmark interest rate by 25 basis points to 4.25%-4.50%.

The rate cut, aimed at stimulating the US economy, sparked concerns about slower economic growth, leading to a sharp sell-off in global markets. Wall Street witnessed a steep decline overnight, with the Dow dropping 2.6% (1,100 points) to 42,326.87, the S&P 500 falling 3% to 5,872.16, and the Nasdaq Composite sliding 3.6% to 19,392.69.

Asian markets followed suit, experiencing widespread losses. In India, sectors including utilities, power, and capital goods bore the brunt, declining by 2.06%, 1.78%, and 1.56%, respectively. Major laggards in the Sensex pack included Tata Motors, Power Grid, NTPC, and ICICI Bank. On the other hand, tech heavyweights like Tata Consultancy Services, Reliance Industries, and Tech Mahindra showed resilience.

Market sentiment has been further dampened by projections from the US Fed, indicating only two interest rate cuts in 2025, compared to earlier expectations of four. The cautious outlook has unnerved investors, causing a broad-based sell-off.

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On Wednesday, the Sensex had already closed lower by 502.25 points at 80,182.20, reflecting bearish sentiment. Analysts suggest that while the Fed’s measures aim to curb inflation, the ripple effects on global equities could persist, necessitating cautious investment strategies.