Short-lived bounce in the markets was sold aggressively into with benchmarks seeing sharp reversals from day high. Sensex, Nifty both collapsed to a fresh 52-week low. All the sectoral indices are in the red with metal index down taking the hardest knock down over 4% in intraday trade. This is not the first time the markets have lost their mojo after a Fed meet. Equities rose following March & May FOMC meetings only to fall sharply soon. Here are the factors at play
1. Fundamentally, nothing changed the Fed delivered as per expectations with absolutely no positive indicators
2. On the contrary, raising the inflation outlook and cutting growth targets set the stage for a possible recession
3. Fed kept the door open for multiple 75 bps rate hikes, a quantum last seen in 1994
4. Fed chief Powell was evasive in answering if he feels 75 bps is enough to break the back of inflation
5. Global markets are worried as central banks will now understand 'synchronised' tightening
6. Hong Kong raised rates on Thursday following Fed third such hike this year
7. Swiss National Bank unexpectedly increased interest rates for the first time since 2007
8. Bank of England pushing rates to the highest level in 13 years