US Fed hints at tapering stimulus, markets wobble

Mumbai: Global markets fell and American dollar gained after US Federal Reserve's minutes released on Wednesday confirmed the US central bank would start tapering bond buying programme sooner and may be later this year itself.
After the holiday on Thursday, the Indian market too could see the impact as investors factor in the implications of US Fed minutes.

As the Sensex and Nifty-50 traded at an all time high on Wednesday before some profit taking, further profit taking could continue on Friday and may well set a reversal after sharp gains in the first half of August.

The US market fell on Wednesday with the Dow Jones and the S&P 500  indices both closing 1.1 per cent lower and the Nasdaq composite fell 0.9 per cent lower.
The Asian market fell on Thursday reacting to Fed minutes led by Hong Kong's Hang Seng(-2.23 per cent), South Korea's Kospi (-1.93 per cent), Japan's Nikkei(-1.10 per cent) and China's Shanghai Composite(-0.57 per cent).  The European market also fell sharply and traded lower with UK 's FTSE down(-1.40 per cent), French CAC(-2.03 per cent) and German Dax (-1.45 per cent).

“As per the published minutes, potential US Fed tapering would pare the $80 billion per month in treasuries and $40 billion per month of mortgage securities this year although the timing and manner of that tapering are still being debated,” said a report.

Earlier during the meeting, the US central bank clarified tapering would not necessarily mean an imminent increase in interest rates.