Major benchmark indices weakened deals mid-afternoon on weak signals 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 percent and on track to make its 5-day winning run. Nifty50 was trading at 16,573, down 298 points or 1.77 percent.
Among Sensex names, Maruti Suzuki added 1.6 percent to Rs 7,430. Asian Paints, M&M, UltraTech Cement and ITC accounted for 1.6 percent. HDFC, Bharti Airtel, Sun Pharma, Titan Company and Axis rose higher. Losers included Tata Steel, Kotak Mahindra Bank, Infosys, NTPC and Reliance Industries, which fell to 2.4 percent.
The broader markets, on the other hand, the BSE Midcap and Smallcap indices fell 1 percent each. India VIX is up more than 6 percent to 27.31.
February retail inflation pressures, which rose 6.07 percent above the RBI’s comfort zone, above a 5.93 percent poll, also weighed on investor sentiment. “With inflation above 6 percent, the current account deficit close to 4 percent of GDP, extreme fiscal stress and an uneven recovery in growth, we expect a sharp rise in macro vulnerabilities,” Nomura India said in a note.
Investors look forward to Fed result
Traders are watching the US Federal Reserve’s two-day meeting to decide interest rate policy. “The US Fed Chair Speech will be paramount as traders watch for indications on the pace of future rate hikes. With inflationary pressures mounting in the US coupled with the Ukraine crisis fueling a rally in commodities, traders are confident the Fed will begin a tightening cycle and then raise interest rates at all six next meetings this year,” he said. Angel Broking in a note. .
According to the CME’s Fedwatch tool, markets are expecting a 25 basis point increase at this meeting, but pricing has risen to indicate a 70 percent chance of a bigger 50 basis point increase at the next meeting in May. Due to concerns about inflation, the brokerage firm said further.
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