Stock markets in India witnessed a sharp decline at the opening bell on Monday, taking cues from the global benchmarks as US markets plummeted following Federal Reserve Chair Jerome Powell claiming that the central bank will not back down in its fight against rising inflation.

The Sensex traded at 57,524.27 points at 9.19 am today, down by 1,309.60 points or 2.23 per cent, while the Nifty traded at 17,181.90 points, down by 377.00 points or 2.15 per cent.

All Nifty 50 stocks traded firmly in the red, data from the National Stock Exchange pointed out.

In a speech to the central banking conference in Jackson Hole in Wyoming, Powell said that the US economy required a tight monetary policy “for some time” before the inflation is brought under control.

The Federal Open Market Committee’s (FOMC) focus right now is to bring the inflation back down to the targeted two per cent.

Powell said, “Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions. While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”

“These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain,” he added.

With inflations at four-decade highs, the US Federal Open Market Committee had in late July hiked the key policy interest rate by 75 basis points to 2.25-2.50 per cent, in anticipation that the increase in the interest rates will be ‘appropriate’.

It may be noted that a hike in interest rates generally cools the demand in an economy, putting the brakes on inflation rate.

Moreover, other major Asian indices also slid on Monday due to the mounting risk of more aggressive rate hikes in the US, said Mohit Nigam, the head PMS at Hem Securities.