Market sentiment suffered a jolt after other Asian markets closed with widespread losses and European markets dropped in early trade
The central bank maintained its bias towards a rate hike.
'If it doesn't, it will continue with measures to infuse liquidity, signalling a new cycle,' predicts Tamal Bandyopadhyay.
Reserve Bank Governor Shaktikanta Das on Monday said despite the latest headwinds arising from the Jackson Hole summit leading to extreme volatility, our banking system and financial markets are strong enough to withstand such pressures. Taking the markets by surprise, US Fed chair Jerome Powell had told the annual Jackson Hole summit of central bankers and economists last week that he would have to keep raising federal fund rates to tame inflation, which remains the biggest challenge to the world's largest economy. He also warned of the pains that such monetary policy actions would create on growth and jobs.
Weaker-than-expected growth in US jobs in recent months had already forced US central bankers to put off a rate hike at their meeting last week
Amid slowing growth and low interest rates, investors will need to focus on stock-picking, suggests John Remmert.
'It will be best for investors to have a systematic investment plan in mid-cap and small-cap funds with a three-/five-year horizon.'
'My sense is that we should be braced for a correction.' 'It has already begun in the mid-caps for the past month, and will now spread to larger stocks as well.' 'Use the correction to upgrade the quality of your portfolio,' advises Akash Prakash.
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