: Markets under pressure, to trade with negative bias #IndiaNEWS #Business <br>The Indian Rupee lost 8 paisa or 0. 10 per cent to close at Rs 82. 04 to the US Dollar. Dow Jones after having gained

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Markets under pressure, to trade with negative bias #IndiaNEWS #Business
<br>The Indian Rupee lost 8 paisa or 0. 10 per cent to close at Rs 82. 04 to the US Dollar. Dow Jones after having gained for four consecutive sessions, lost for four consecutive sessions. The first day of the week saw gains and then it lost on the remaining four days. Dow Jones was down 1,481. 33 points or 4. 44 per cent to close at 31,909. 64 points.
There were two events that hit trading sentiment in the US this week. The first was the statement from Jerome Powell about interest rates. FED Chairman Jerome Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected. The FED interest band is currently 4. 50 per cent-4. 75 per cent and it is expected that there would be one rate hike of 50 basis points and at least two more of 25 basis points before a pause. With this comment there may be two or three rate hikes of 50 basis points taking the rate to around 5. 75 per cent-6 per cent.
The second event was the Federal Deposit Insurance Corporation putting under receivership, Silicon Valley Bank. The bank funds startups and sold a 21 billion bond portfolio to repay depositors. The portfolio consisted of mostly US Treasuries and the average yield was 1. 79 per cent, far below the current 10-year treasury yield of 3. 9 per cent. This resulted in a loss of 1. 8 billion dollars which the bank proposed to raise through fresh equity issues. The share price fell by 60 per cent and was hence called off. This as per media reports is the first of many US banks feeling the heat of rising interest rates.
A thought which comes to mind is that this is the fall-out with just one bank. If a couple more were to go belly up it could shake the entire system.
The financial year 2022-2023 is coming to an end and there are expectations that mutual funds may invest in shoring up their NAVs in the coming days. This used to be the practice in earlier years, but nowadays the system is that of a daily NAV and a weighted average NAV. It therefore does not make much sense in trying to shore up.
However, the Midcap and Smallcap segments did show remarkable poise and strength in the week gone by. Whenever markets have begun to fall sharply and attempt to make a medium term bottom, the selling happens across the board. There has so far not been a single occasion when such a large segment like the midcap and Smallcap segment has remained unaffected. Can this time be different and are we ready to rewrite the history books, only time will tell.
Markets are jittery and the mood is down in the dumps across geographies whether it be the US or India. It seems that the turnaround right away is virtually impossible.

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