Sensex Tanks 1,000 points, Nifty Below 16,600 Amid Weak Global Cues; 5 Points

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The key benchmark indices weakened in mid-noon deals mirroring the weak cues from the US and UK markets. At 2.25 pm, the BSE Sensex was trading at 55,497, down 1,057 points or 1.87 per cent and on course to snap its 5-day winning run. Nifty50 was quoting at 16,573, down 298 points or 1.77 per cent. The broader markets, on the other hand, the BSE Midcap and Smallcap indices fell 1 per cent each. India VIX surges over 6 per cent to 27.31.

Top Gainers & Losers

Among Sensex names, Maruti Suzuki added 1.6 per cent to Rs 7,430. Asian Paints, M&M, UltraTech Cement and ITC added up to 1.6 per cent. HDFC, Bharti Airtel, Sun Pharma, Titan Company and Axis edged higher. Losers included Tata Steel, Kotak Mahindra Bank, Infosys, NTPC and Reliance Industries which declined up to 2.4 per cent.

Shares of Ruchi Soya Industries surged 18 per cent to Rs 1,140 on the BSE in Tuesday’s intra-day trade, zooming as much as 42 per cent in the past two trading sessions after the company announced plans to launch Rs 4,300-crore follow-on public offering (FPO) next week.

Retail Inflation

February’s retail inflation print, which came in above the RBI’s comfort zone at 6.07 per cent, above a poll estimate of 5.93 per cent, also weighed on the investor sentiment. “With inflation above 6 per cent, the current account deficit at nearly 4 per cent of GDP, extreme fiscal stress and an uneven growth recovery, we project a sharp rise in macro vulnerabilities,” said Nomura India in a note.

Investors Eye Fed Outcome

Traders eye the US Federal Reserve’s two-day meeting to decide the rate policy. “The US Fed Chair Speech shall be of utmost importance as traders will be looking out for indications about the pace of future rate hikes. With inflationary pressures building in the US coupled with the Ukraine crisis that is fuelling a rally in commodities, traders are certain the Fed will kick off a tightening cycle and then raise rates at all six subsequent meetings this year,” Angel Broking said in a note.

According to the CME’s Fedwatch tool, markets anticipate a 25 basis point rise at this meeting but pricing has risen to indicate a 70 per cent chance of a larger 50 basis point hike at its subsequent meeting in May, due to concerns about inflation, the brokerage firm further said.

Oil Tumbles to 2-Week Low

Oil prices extended losses on Tuesday, sliding to a two-week low as ceasefire talks between Russia and Ukraine eased fears of further supply disruptions and surging COVID-19 cases in China fuelled concerns about slower demand. Brent futures dropped $5.95 or 5.6 per cent to $100.95 a barrel by 0747 GMT after tumbling by more than $6 to $100.05 earlier in the session. U.S. West Texas Intermediate (WTI) crude fell below $100 level for the first time since March 1, dropping $5.49 or 5.3 per cent to $97.52 a barrel. It fell to as low as $96.70 earlier in the session. Both benchmarks declined by more than 5 per cent the previous day.

Resurgence of Covid

The resurgence of Covid cases in China is also likely to spook investors. In Asia, shares in Australia, South Korea, Hong Kong, and Shanghai were all down, while in Japan it closed on a flat note.

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