US Stocks tumble on rate hike worries

The US stocks tumbled on Wednesday, 05 January 2022, with the Nasdaq and the S&P 500 all settling notably below the unchanged line, as investors reacting negatively to the minutes of the latest Federal Reserve meeting, focusing on more hawkish removal of monetary stimulus than had feared.

At the close of trade, the Dow Jones Industrial Average index stumbled 392.54 points, or 1.07%, to 36,407.11. The S&P500 index retreated 92.96 points, or 1.94%, to 4,700.58. The tech-heavy Nasdaq Composite Index declined 522.54 points, or 3.34%, to 15,100.17.

Total shares volume turnover on U.S. exchanges stood at 10.22 billion shares, up from yesterday's 10.16 billion shares. Declining stocks outnumbered advancing ones on the NYSE exchange by 2760 to 645 and 130 closed unchanged. In the NASDAQ, 948 issues advanced, 3844 issues declined, and 205 issues unchanged.

All 11 major S&P 500 sector indexes declined, with bottom performing issues were real estate (down 3.22%), information technology (down 3.13%), communication services (down 2.94%), and consumer discretionary (down 2.64%).

The selloff in the Wall Street came after 14-15 December 2021 meeting minutes released by the Federal Reserve indicated that it might not only raise interest rates sooner than expected but could also begin reducing its overall asset holdings to tame high inflation. Policymakers agreed to hasten the end of their pandemic-era program of bond purchases, and issued forecasts anticipating three quarter-percentage-point rate increases during 2022.

ECONOMIC NEWS: Fed Minutes Indicate Faster Normalisation Of Policy Rates- Fed minutes of the December 14-15 meeting, released on Wednesday stated that "very tight" U.S. labour market might warrant raising rates sooner, and indicated they could also reduce the central bank's overall asset holdings to tame high inflation. Some Fed policymakers also noted that it could be appropriate to start reducing the size of the balance sheet soon after the central bank begins raising interest rates. "They noted that current conditions included a stronger economic outlook, higher inflation, and a larger balance sheet and thus could warrant a potentially faster pace of policy rate normalization," the minutes said. The minutes noted many participants also judged that the appropriate pace of balance sheet runoff would likely be faster than it was during the previous normalization episode.

US ADP Private Sector Job Growth Surges In December-US private sector employment surged in the month of December, according to a report released by payroll processor ADP on Wednesday. ADP said private sector employment spiked by 807,000 jobs in December after jumping by a revised 505,000 jobs in November. The much stronger than expected private sector job growth reflected broad-based gains, with employment in the service-providing sector soaring by 669,000 jobs amid a jump in leisure/hospitality jobs.

Among Indian ADR, INFOSYS fell 3.23% to $24.30, Dr Reddys Labs fell 1.21% to $63.94, WNS Holdings fell 2.2% to $85.94, Azure Power Global sank 6.4% to $16.61, and Tata Motors lost 0.87% to $31.95. Wipro fell 2.66% to $9.51, and HDFC Bank fell 0.1% to $67.24. ICICI Bank added 1.7% to $20.88.

Powered by Capital Market - Live News