New Delhi, Sep 21 (IANS): Even though the ‘hawkish pause’ from the Fed was on expected lines, the US markets reacted negatively since the indication from the Fed is that rates will remain ‘higher for longer’, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The US GDP growth projection now stands at 2.1 per cent for 2023 and 1.5 per cent for 2024 recovering to 1.8 per cent in 2025. As the Fed chief said, “soft landing is a plausible scenario.”

For Nifty down 141 points, the biggest drag will be more FII selling in response to the rising dollar and US bond yields. The dollar index above 105 and the US 10-year bond yield at 4.39 per cent suggest continued FII selling which has touched Rs 13925 crores so far in September. But DII plus retail buying is likely to support the market on declines, he said.

Domestic consumption stories like automobiles, hotels and real estate are on strong wicket and the capital goods segment has been witnessing buying in recent weeks even when FIIs were sellers in the market. PSU banks are likely to witness renewed buying on declines since their valuations are attractive and prospects look good, he added.

BSE Sensex is down 428 points at 66372 points on Thursday. ICICI Bank, TCS, M&M are down more than 1 per cent.