Sensex, Nifty join global selloff on US Fed rate hike fears

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Declining for the third straight session, equity benchmark Sensex tumbled over 575 points on Thursday, tracking heavy losses in index-heavyweights HDFC twins, TCS, and Reliance Industries amid a selloff in global equity markets.

US Fed meeting minutes indication to a faster than expected policy rate hike to fight elevated inflation and surging oil prices amid uncertainties on the geopolitical front further weighed on sentiment, traders said.

Investors also await cues from the RBI policy meeting outcome, which will be announced on April 8.

The 30-share gauge slumped 575.46 points or 0.97 per cent to settle at 59,034.95. During the day, it plunged 633.06 points or 1.06 per cent to 58,977.35.

The broader Nifty-50 also declined 168.10 points or 0.94 per cent to close at 17,639.55.

HDFC twins remained among the biggest drags for the second consecutive session on Thursday, slipping nearly 3 per cent.

Titan was the biggest loser in the Sensex pack, falling 3.24 per cent, followed by HDFC, HDFC Bank, Wipro, TCS, Reliance Industries Limited, and Power Grid.

On other hand, Axis Bank, Hindustan Unilever, ICICI Bank, M&M, and Dr Reddy’s were among the gainers, rising up to 2.38 per cent.

In the broader market, the BSE smallcap gauge declined 0.75 per cent and the midcap index dipped 0.42 per cent.

As many as 1,714 stocks declined, while 1,694 advanced and 106 remained unchanged.

In Asia, markets in Hong Kong, Seoul, Shanghai, and Tokyo settled with deep losses.

European stocks were also trading on a negative note in early deals. The US indices ended lower in the overnight session.

Negative sentiment continued for the third straight session as the US Fed’s hawkish stance has raised concerns of steeper interest rate hikes going ahead, while investors also trimmed their positions ahead of RBI policy, although most of the experts believe the MPC may maintain status quo on policy rates,” Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.

The fall was largely due to profit-taking in Reliance Industries and other energy stocks amid volatility in global crude oil prices, he added.

Asian shares retreated on Thursday, in line with the overnight global selloff. European shares on Thursday recovered from a selloff, even though risks from a hawkish Federal Reserve and Washington’s new sanctions on Russia kept investors on edge, Deepak Jasani, Head of Retail Research, HDFC Securities, noted.

International oil benchmark Brent crude jumped 0.93 per cent to USD 102 per barrel.

“Volatility increased as the market approached the RBI policy meet outcome. The latest sectoral outperformers like metals, power, and oil & gas sectors were the most hit including mid & small caps.

“If announcements are in-line with market expectations, like rates being unchanged, inflation forecast moderately increased and robust economic outlook maintained, then the market will trade positively considering corrections during the week and falling crude prices or else challenges will prevail,” Vinod Nair, Head of Research at Geojit Financial Services, said.

Among BSE sectoral indices, oil and gas declined the most by 2.59 per cent, followed by energy (2.28 per cent), consumer durables (1.98 per cent), and utilities (1.54 per cent).

In contrast, healthcare, FMCG, bank, and realty gained on the BSE.

“Recent market weakness is partly due to the increasingly hawkish commentary from the US Fed,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

Foreign institutional investors offloaded shares worth Rs 2,279.97 crore on Wednesday, as per exchange data.

“Domestic equities closed lower, following the negative global cues. Investors continue to focus on Fed’s possible aggressive monetary policy stance whilst tracking the developments of the Russia-Ukraine war,” according to Mitul Shah, Head of Research at Reliance Securities.