The Rate Rise Arrived and the Market Rose Three Days Running — the Damage Came on Tuesday, Before It Happened, and Then From a Boardroom; Nifty −0.22% to 23,346, Sensex −0.65% to 74,295
NeutralThe Nifty 50 fell 0.22% to 23,346.40 and the Sensex 0.65% to 74,294.96 — a sixth consecutive down week for both and, for the Sensex, its longest losing streak since 2020, but on the Nifty the mildest of the six after −0.83%, −0.47%, −0.31%, −1.15% and −2.09%. Across the six weeks the Nifty is 4.98% below its 7 August close. Monday was a market holiday for Ganesh Chaturthi, and the shape of the four sessions that followed is the lesson: Tuesday alone fell 279.50 Nifty points and 777.94 Sensex points, more than the whole week’s eventual loss, on crude above $100 and the near-certainty of a US rate rise. Then the rate rise happened and the market went up for the rest of the week — Wednesday +99.00, Thursday +53.00, Friday +75.80. All four sessions reconcile to the point on both indices against the closes published here last Saturday. The Federal Reserve raised rates 25 basis points to 3.75–4.00% on 16 September in a 12–0 vote, its first increase since July 2023, with 16 of 18 participants projecting at least one more this year. India VIX nonetheless fell about 7% to 11.39. The second force was domestic and unrelated to earnings: Tata Sons’ board voted 4–1 on Thursday to reappoint N Chandrasekaran and back a listing of the unlisted holding company, Tata Trusts called the resolution illegal, and on Friday the listed Tata companies fell together — which, because they weigh more in the Sensex than the Nifty, is the largest single reason the two indices disagreed. India’s August CPI rose to 4.82%, the highest since December 2024, WPI to 9.92%, and the Reserve Bank ran its first outright open-market bond sale in about nine years.
Key Points This Week
- 1Nifty −0.22% to 23,346.40 and Sensex −0.65% to 74,294.96 — a sixth straight down week and the Sensex’s longest losing streak since 2020, though the mildest of the six; every session verified and summed to the point on both indices
- 2The anticipation cost more than the event: Tuesday alone took 279.50 Nifty points before the decision, then the market rose all three sessions after the Fed raised rates 25 bps to 3.75–4.00% in a 12–0 vote · India VIX fell ~7% to 11.39
- 3A disputed 4–1 Tata Sons board vote, not earnings, split the two indices — Tata Chemicals −8% and Tata Investment −5.1% on Friday after rising 13.2% and 7.9% across the week on the prospect of a listing
- 4One week, four answers: Sensex −0.65% against Nifty −0.22% in India, and Nasdaq +0.72% against Dow −1.69% in the US — an index is a weighting scheme, not a market
- 5India CPI 4.82%, the highest since December 2024, and WPI 9.92% · the RBI took the full ₹50,000 crore in its first outright bond sale in about nine years, against ₹66,590 crore of bids · Moody’s raised its FY27 growth forecast to 7.0%
SIP Investor Advice
This week is a useful argument against acting on anticipation. The entire six-week decline now stands at 4.98% on the Nifty, and the latest instalment of it was 0.22%. More to the point, the fall everyone was braced for — the first US rate rise since 2023 — arrived on Wednesday, and Indian equities rose on each of the three sessions after it. The damage had been done on Tuesday, in advance, by the worrying rather than the event. A monthly SIP took no view on the Federal Reserve and did not need one; it simply bought units at each of those prices, as it is designed to. The more interesting check this week concerns what you actually own. Over the same four sessions the Sensex fell 0.65% and the Nifty 0.22%, and in the United States the Nasdaq rose 0.72% while the Dow fell 1.69% — four different verdicts on two markets, because each index weights different companies. Most Indian equity funds track neither Indian benchmark exactly, and mid- and small-cap funds had a different week again, with the Midcap 100 finishing flat. It is worth asking your Relationship Manager which benchmark each of your schemes is actually measured against, so that the next alarming headline can be read against the right yardstick. One cautionary note from the week: Tata Chemicals rose 13.2% and then fell 8% in a single session, and Tata Investment rose 7.9% and fell 5.1%, because money was speculating on whether an unlisted parent company would list. Neither business changed. Positions that depend on what a board might decide are wagers, not investments, and they are not how a long-term portfolio is built. Mutual fund investments are subject to market risks; read all scheme-related documents carefully.
Market data shown is illustrative/sample only. Not real-time. All information is for educational purposes and should not be construed as investment advice. Past performance does not guarantee future returns.