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The dollar index, which measures the value of the US greenback against a basket of other foreign currencies, gained 14 percent so far this year. This was primarily due to the aggressive rate hike decision of the US Federal Reserve and global investors moving assets to the perceived safety of the US amid geopolitical tensions.

Market participants had their ears trained to catch any hint of change of monetary-policy stance and to get a sense of the trajectory of inflation. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, it will also bring some pain to households and businesses. He relied on the historical record that cautions strongly against prematurely loosening policy.

Most people buy thinking that it will go up and I will make money quickly, but how quickly is something people do not factor. In options, you lose money very fast because you are always constantly fighting the time value and markets

Friday’s US slump further shriveled a global bounce in shares from June bear-market lows that was predicated partly on bets of a Fed shift to rate cuts next year as growth slows. Powell spelled out the need for sustained restrictive policy, comments that lifted the US two-year Treasury yield toward 2022’s high and sent investors scurrying to the dollar as a shelter from volatility.

With a rally of 4.4 per cent, Nifty PSU Bank index was among the top gainers in the week with Central Bank of India, Indian Bank, PNB and Bank of Baroda leading the upside. Jatin Gohil, Technical & Derivative Research Analyst at Reliance Securities, says Bank of Baroda has surpassed its hurdle convincingly, while Canara Bank and Indian Bank are poised for fresh up-moves.

Recession is defined as the period when the economic activities, i.e., demand and supply breakdown below the normal level of momentum in the economy. Gross domestic products (GDP) is used as a key indicator to assess the rate of growth of an economy. Quarterly data of real GDP growth provides a decent indication of the ongoing economy.

According to data with depositories, FPIs pumped a net amount of Rs 49,254 crore in Indian equities during August 1-26. This is the highest investment made by them so far in the current year.

The Fed Chairman reaffirmed the need for continuing with the rate hikes to get inflation under control. Powell said that the economy needs tight policy for some time before inflation is under control.

"Till now FIIs had been positive in cash markets, but this may change with any negative news flow from global markets. In my view, both the bank & IT sectors may face the heat this week, but FMCG & pharma may be a support. In the overall series, we are cautious about overall markets keeping broader geo-political risk in mind."

"I think still maybe next quarter there could be some level of downgrade coming in the market, but that should be small. It cannot be as high as it was in Q1 but because broadly the negative news flow was mainly around inflation, geopolitics and interest rates. The data is telling us that the negative news flow is broadly there, I do not think there is anything new unless and until we see some new Black Swan event coming off from somewhere."