A SEA OF RED – RBI coming out with a sudden announcement to hike interest rates only added to the prevailing pessimism. Markets cracked hard in reaction to this with Nifty 50 losing 4% and other benchmarks losing between 4% & 6% this week. Volatility has spiked & FIIs have continued to sell aggressively while Domestic inflows have ensure that the fall isn’t bigger. Rising yields , soaring inflation , partial lockdowns in few parts of China , constant outbreak scare of other variants of COVID , war tensions , etc are a few major factors that may be responsible for this downtrend. Interest rates are likely to be higher till inflation is brought under control in which case stock markets may not react to this in a positive way. This may be a good time to reevaluate your risk appetite & diversification if you came under panic in any of the last few trading sessions.
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