MARKET UPDATES: Indian stocks fell during the morning trade on Thursday, following the sharp overnight decline in US markets as a result of the US Federal Reserve's decision to continue tightening monetary policy in an effort to reduce inflation to its target level. At the same time, the banking system continued to be volatile as a result of recent bank failures.

Increases in interest rates in advanced economies have a negative impact on India and other developing nations because investors are more likely to move their money there where returns are predictable and reasonable.
"After the Federal Reserve increased interest rates by another 25 basis points on Wednesday while stressing that policymakers were not pencilling in rate reduction this year, U.S. markets finished substantially lower in choppy trading. The decisions were made notwithstanding recent stress in the banking sector brought on by the failure of two regional banks in the United States "the head of retail research at HDFC Securities, Deepak Jasani.

Both the Sensex and the Nifty were down 0.5 percent at that time, with all save the Nifty auto index trading in the negative.
The US Monetary Policy Committee raised the benchmark interest rate by 25 basis points to 4.75–5.0% in an effort to achieve maximum employment and inflation at a longer-term rate of 2%.

"The American banking system is strong and dependable. Recent events are probably going to make it harder for people to get credit, which will have an impact on hiring, inflation, and economic growth. Uncertainty surrounds the scope of these impacts. The Committee is still very aware of inflation risks "As per the US Monetary Statement, following the two-day discussion that ended on Wednesday.

The Silicon Valley Bank, a well-known international lender in the field of technology startups, failed on March 10 as a result of a bank run, necessitating intervention by the US federal government. Authorities closed the tech lender and gave the US Federal Deposit Insurance Corporation ownership of it (FDIC).

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