The Indian equity benchmarks crashed on Monday mirroring losses in global markets after US Federal Reserve Chair Jerome Powell dashed market participants’ hopes that it may soon ease up on high interest rates in its effort to tame inflation. The Sensex fell as much as 1,466 points and Nifty 50 index touched an intraday low of 17,166.
As of 9:34 am, the Sensex was down 981 points at 57,852 and Nifty 50 index dropped 284 points or 1.6 per cent to 17,275.
The Fed on Friday indicated it will raise rates into next year as it tries to quell demand and bring down prices for goods and services. But some investors speculated the central bank might pause or even reverse course next year if inflation subsides, leading to a rally for stocks in July and early August.
Asian shares slid on Monday as the mounting risk of more aggressive rate hikes in the United States and Europe shoved bond yields higher and tested equity and earnings valuations.
Japan's Nikkei fell 2.75 per cent, Taiwan Weighted declined 2.46 per cent, Hong Kong's Hang Seng fell 0.97 per cent and South Korea's KOSPI dropped 2.2 per cent.
On Friday, S&P 500 lost 3.4 per cent, its biggest drop since mid-June, after Jerome Powell said the Fed will likely need to keep interest rates high enough to slow the economy “for some time” in order to beat back the high inflation sweeping the country.
Back home, selling pressure was visible across sectors as all the 15 sector gauges, barring the index of FMCG shares, were trading lower led by the Nifty IT index's nearly 4 per cent fall. Nifty Metal, Media, PSU Bank, Private Bank, Consumer Durables, Financial Services and Bank indices also fell between 1.5-3 per cent.
Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 index dropped 1.4 per cent and Nifty Smallcap 100 index fell 1.73 per cent.
Tech Mahindra was top Nifty loser, the stock fell 5.6 per cent to Rs 1,025. Infosys, HCL Technologies, Wipro, JSW Steel, Tata Consultancy Services, Hindalco, Kotak Mahindra Bank, Tata Steel, Tata Motors, Power Grid and HDFC Bank also fell 1.8-4.4 per cent.
On the flipside, Hindustan Unilever, Apollo Hospitals, Britannia Industries, Maruti Suzuki, Ultratech Cement and Nestle India were among the notable gainers.
The overall market breadth was extremely negative as 2,154 shares were declining while 859 were advancing on the BSE.
