Explanation:

Both statements 1&2 are correct.
Recently, the US Federal Reserve (central bank of US) has signalled a possible hike in interest rates. This has led to a nervous reaction in Indian markets.

• Rate hikes by the Federal Reserve affects not only the US economy, but also shapes the macroeconomic outlook and exerts a certain degree of influence on the monetary policies in other emerging economies.

Impact of increased Interest Rates on India

• On Equity Market: Bond yields will rise due to the growing dollar shortage in the global market.
• Previously, in India, the debt and equity markets witnessed outflows of over Rs 40,000 crore rupees, due to the strengthening dollar and uncertainties perpetrated by the trade war between the US, China, European Union, and other major nations.
• On Export and Forex: India being one of the largest crude oil importers of the world.
• A weaker rupee vis-à-vis a dollar results in more expensive imports of crude oil that may put cost-driven inflationary push across the whole economy and especially in those sectors that are highly sensitive to crude oil price movements.
• India’s exports on the other hand, notably IT and IT-enabled services – will benefit to some extent from a stronger dollar with respect to the rupee.
• However, the same benefit may not fully accrue to exporters due to strong competition in the export market

Hence option 1st is correct.