Indian stock markets cracked on the stock exchanges on Monday, bleeding under global pressure. Meanwhile, bond yields rose and emerging market currencies hit new lows against the US dollar. Against this backdrop, the S&P BSE Sensex plunged 1,776 points over the course of the day before closing at 52,847, down 1,457 points or 2.68 percent. The Nifty50, on the other hand, fell 427 points, or 2.64 percent, to settle at 15,774. The index hit a low of 15,684 in intraday trading.
Fear of inflation destroys Havok
The havoc comes after US inflationary pressures, at a 40-year high of 8.6 percent, rekindled fears in May that central banks will be forced to aggressively tighten monetary policy. The US Fed, Bank of England and Bank of Japan will announce their respective interest rate decisions this week.
Top losers and winners
Nestle India was the only Nifty50 company to finish 0.5 percent higher. The biggest laggards were Bajaj Finserv, IndusInd Bank, Bajaj Finance, Hindalco, Tech M, Tata Motors, ICICI Bank, Adani Ports, NTPC and TCS. All of these shares fell between 4 and 6.7 percent.
In the broader markets, the Nifty MidCap 100 and SmallCap 100 fell 2.9 percent and 3.8 percent, respectively. Sector-wise, all indices sank on the NSE, with the Nifty IT and Media indices falling 4 percent each and Nifty Bank falling more than 3 percent
Domestic inflation data expected
India’s inflation report is expected today, and investors are concerned about the Reserve Bank of India’s next move.
Mohit Nigam, head — PMS, Hem Securities, said: “If retail inflation in India continues to grow and exceed the 8 percent milestone, the market will become more volatile. Investors can wait for the market trend to clear up, but long-term investors should stay invested if they have a long-term investment plan, as a major correction gives investors the opportunity to buy high-quality stocks at attractive prices.”
Volatility to stay
India VIX is up about 13 percent while all sectors are deep red.
Pankaj Pandey, Head – Research, ICICIdirect, said: “As for the outlook for the stock market, while we believe that short-term volatility may persist, the recent low offers long-term investors an opportunity to attract quality companies with sustainable growth visibility In the medium term, we continue to be constructive on domestic consumption, capital goods and related aerospace and domestic production games.”
What should investors do?
Manoj Dalmia, founder and director of Proficient Equities Private Limited, said: “Investors should make small gains on their recent investments if made on a swing basis and avoid heavy buys. Instead, a small amount can be bought with each dip. in the case of value stocks and It is good to have a cash reserve at this time, because any dip can be seen as an investment opportunity.”
The expert opinions and investment tips in this News18.com report are their own and not the website’s or its management. Users are advised to contact certified experts before making any investment decisions.
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