No stop to the drop: Markets set for fourth straight monthly decline

The benchmark Nifty50 is set to post its fourth straight monthly decline. The 50-share index is down 1.3 per cent in March with one trading session remaining. 

If the Nifty finishes in the red for the month, this will be the first time in over two decades that the index has fallen for four straight months. 

Previously, the market has declined for four or more straight months only on six occasions — with the worst rout in 1994 when the Nifty had dropped 27 per cent in eight straight months. Interestingly, the global market crash in 1994 was on account of a very sharp and sudden sell-off in the bond markets, which started in the US and then spread across the globe. 

This time also, the world markets are under pressure after following the US Federal Reserve’s (Fed’s) aggressive rate hikes. After the latest 25-basis-point (bp) rate hike by the Fed on March 22 the aggregate of rate hikes in the past one year is 500 bps to take the rate to 4.75-5 per cent — a new high since 2007.