Wall Street sees biggest intraday fall since 2020 on Fed stance; SGX Nifty hints at negative opening for Indian market, drops over 200 points

The US market witnessed the biggest intraday fall since 2020 as U.S. Treasury yields jumped and global equity markets tanked on Thursday, erasing the prior day`s rally on Wall Street over aggressive central bank policies around the world to contain inflation.  

Wall Street benchmarks Dow Jones closed with over 1000 points loss, Nasdaq dropped nearly 650 points and S&P 500 settled with a cut of more than 150 points on Thursday. 

On Wednesday, the Reserve Bank of India also raised repo rate by 40 basis points (bps) in an unscheduled MPC meeting as inflation remained unchecked 

Though Indian market managed to close in the green amid buying interest in IT and auto stocks on Thursday, SGX Nifty hinted at a negative opening for the Indian market. The SGX Nifty Futures index on the Singaporean exchange was trading lower by more than 200 points in the early trade around 7.30 am on Friday.  

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अमेरिकी बाजारों में साल 2020 के बाद सबसे बड़ी इंट्रा-डे गिरावट...#DowJones 1000 अंक और #NASDAQ 5% टूटकर बंद... pic.twitter.com/Mf6dAFwXZv

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Earlier, global equity markets tanked on Thursday, erasing the prior day`s rally on Wall Street, amid aggressive central bank policies around the world to tamp down inflation. 

The rout on Wall Street snuffed a rally in European stocks. Fears of a recession, as the Bank of England suggested after it hiked rates earlier in London, quashed enthusiasm from Federal Reserve Chair Jerome Powell`s remarks on Wednesday when he said policymakers were not considering 75 basis-point moves in the future, said Reuters. 

The yield on 10-year Treasury notes rose 12.2 basis points to 3.037%, with inflation-hedge gold rising after Powell emphasized risks to the economy from soaring inflation. 

Worries about fast-paced rate increases at a time of China`s COVID-19 lockdowns and the war in Ukraine to slow surging inflation have heavily weighed on stock markets this year. 

The pan-European STOXX 600 index fell 0.70% after opening 1.84% higher. MSCI`s gauge of global stock performance shed 2.55% as it tumbled to lows last seen in March 2021. The global benchmark is down 14% year to date. 

Britain`s pound and government bond yields fell sharply after the BoE raised rates to their highest level since 2009 to counter inflation heading above 10% and warned the UK economy was at risk of recession. 

Sterling was last at $1.2364, down 2.04% on the day, while the euro fell 0.7% to $1.0547 after dire German industrial orders data on Thursday. 

German industrial orders fell more than expected in March,driven mainly by declining orders from abroad as the war inUkraine hit manufacturing demand in Europe`s biggest economy. 

With Reuters inputs