How will Sensex react to Fed rate hike? Here’s the track record

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The US Fed’s decision to hike interest rates will have a direct impact on Sensex, as the markets in India are highly dependent on foreign inflows. 

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A higher interest rate makes it more expensive for foreign investors to invest in Indian stocks and bonds, which could lead to outflows and a sell-off in the market.

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The last time the Fed hiked rates, in December 2015, the Sensex fell sharply by over 1,600 points in just two trading sessions. 

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The market has since recovered from those lows and is now trading at around 30,000 levels.

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In the past, whenever the US Fed has hiked rates, it has led to a sell-off in the Indian stock market. 

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However, the magnitude of the impact has varied. 

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For instance, in May 2013, when the US Fed first hinted at a possible rate hike, the Sensex fell by over 2%.

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However, it is worth noting that the Indian stock market has become more resilient in recent years and has been less impacted by global events. 

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This is due to the fact that the Indian economy is now in a much better shape than it was a few years ago and is less dependent on foreign flows.

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