Mkts bearish as US Fed turns Hawkish

Mumbai: Equity benchmark Sensex declined nearly 540 points on Thursday, pressured by heavy selling in index heavyweights Reliance Industries (RIL), Bajaj Finserv and ICICI Bank amid a sluggish trend in the global markets. Besides, concerns over a sharp interest rate hike by the US Federal Reserve and a weak rupee against major currencies overseas further weighed on sentiment, traders said. Snapping its three-day gaining streak, the 30-share BSE Sensex opened strong, but came under severe selling pressure to close 541.81 points or 0.90 per cent lower at 59,806.28. Similarly, the broader NSE Nifty declined 164.80 points or 0.93 per cent to 17,589.60.

“Nifty snapped a three-day rally and ended in the negative, pulled down by negative global cues. At close, Nifty was down 0.93 per cent or 164.8 points at 17,589.6. Volumes on the NSE fell compared to the recent average. Broad market indices fell less than the Nifty even as the advance decline ratio closed at 0.72:1. Global stock markets were mostly lower on Thursday amid worries about weaker-than-expected Chinese inflation data that pointed to a sluggish economic recovery in the country and possibility of more and sharp US interest rate hikes. The US government's comprehensive monthly report on hiring is due out Friday that may give some hint about the need to raise rates and quantum thereof,” said Deepak Jasani, head (retail research), HDFC Securities. “Selling pressure came to the fore after three days of relief rally, as US Fed signalling further rate hike to tame inflation reignited worries of slowing growth. Also, the rising bond yields in the last few sessions are indicating that risk-off sentiment in equities will prevail going ahead and liquidity could tighten,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.

“The domestic market could hardly hold on to its previous gains as the Fed Chair's reaffirmation of his Hawkish statement brought in more worries.