Markets corrected significantly this week with smallcaps down over 5% on inflation and interest rate concerns
Several factors contributed to the steep market fall:
- Unanticipated rate hike by RBI
- 50 bps rate hike by Fed
- Inflation continuing to rise
- Global volatility and sell-off in tech stocks
If rate hikes continue to take place at a fast pace and inflation persists, we can expect more volatility, especially in smallcaps and high-growth sectors.
While tech stocks corrected sharply in the U.S, Indian IT stocks outperformed markets in the week. It was auto and pharma stocks that saw the sharpest correction amongst major sectors.
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