India’s equity indices dropped over 1% as traders cut bullish bets ahead of a US inflation reading on Thursday that is expected to impact the Federal Reserve’s interest rate cut timing. Nifty fell 1.11% to close at 21,951, while BSE’s Sensex declined 1.08% to close at 72,304. Nifty Midcap 150 and Nifty Smallcap 250 index also declined. Some analysts attributed the fall to record high open interest in index and futures.
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Market fears are growing that the US Federal Reserve may delay an expected interest rate cut due to higher inflation in the country. The recent rise in US inflation has put pressure on gold prices. This development has caused concerns among investors who were anticipating a rate cut as a measure to stimulate the economy. The market will closely monitor the Federal Reserve’s decisions in the coming weeks.
