After a strong advance ahead of the US Federal Reserve’s policy statement later today, cautious investors booked profits, causing India’s share market to drop for three consecutive days, with the Nifty down about 600 points since Monday. After a strong 6.1 percent comeback from late November lows, the NSE index has fallen 2.5 percent since Friday’s finish.
The current drop has also been caused by profit booking and market hesitancy ahead of the Fed announcement. The Nifty’s 24,000 mark is a crucial milestone to monitor; as long as this level is held, an upward bias is anticipated.
Following rate reduction of 50 basis points in September and 25 basis points in November, a 25 basis point rate decrease by the US Fed is generally anticipated. A move of this kind is already priced in and may result in positive sideways consolidation. Indian markets might experience a further 3–4% drop, though, if the Fed decides against lowering interest rates.
The next Monetary Policy Committee (MPC) meeting of the Reserve Bank of India, which is set for February 5–7, will be important to observe under new Governor Sanjay Malhotra. India may not lower interest rates as quickly as the US, which could lead to poor performance in Indian markets in 2025.
