Sensex, Nifty lose 1% as markets plunge after US inflation dashes rate cut hopes

Mumbai: Benchmark equity indices Sensex and Nifty plunged by 1 per cent on Friday due to across-the-board profit taking by investors after a recent record-breaking rally as US inflation data dashed hopes of a rate cut by June.

The 30-share BSE Sensex tanked 793.25 points or 1.06 per cent to settle at 74,244.90 with 27 of its components ending in the red. During the day, it dropped 848.84 points or 1.13 per cent to 74,189.31.

The NSE Nifty declined 234.40 points or 1.03 per cent to close at 22,519.40 with 45 of its constituents settling lower. All Nifty sectoral indices closed in the red.

From the Sensex basket, Sun Pharma, Maruti, Power Grid, Titan, JSW Steel, Tech Mahindra, Larsen & Toubro and State Bank of India were the major laggards.

Tata Motors, Tata Consultancy Services and Nestle were the gainers.

“US inflation soared by 0.4% MoM, surpassing expectations and triggering a spike in US Treasury yields. Investors are questioning the feasibility of the US Fed’s anticipated three rate cuts this year, leading to underperformance in EMs. Meanwhile, European markets excelled as the ECB maintained policy rates but hinted at a potential rate cut soon.

“Indian markets consolidated amidst worries over delayed US rate cuts, escalating Middle East tensions driving oil prices up, and subdued Q4 earnings projections,” said Vinod Nair, Head of Research, Geojit Financial Services.

In Asian markets, Tokyo settled in the positive territory while Seoul, Shanghai and Hong Kong ended lower.

European markets were trading in the positive zone. Wall Street ended mostly with gains on Thursday.

“Nifty ended sharply lower on April 12 on profit booking across the board. Asian stocks fell on Friday as traders priced in less monetary policy easing by the US Fed this year,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

In the broader market, the BSE smallcap gauge declined 0.60 per cent and midcap index dipped 0.49 per cent.

All the indices ended lower, with oil & gas falling by 1.28 per cent, utilities (1.02 per cent), realty (0.96 per cent), bankex (0.91 per cent) commodities (0.84 per cent), IT (0.84 per cent) and financial services (0.81 per cent).

A total of 2,373 stocks declined while 1,466 advanced and 104 remained unchanged.

Post-market hours, TCS announced its Q4 earnings. Industrial production for February and inflation data for March were scheduled for release later in the day.

Global oil benchmark Brent crude climbed 0.95 per cent to USD 90.56 a barrel.

Foreign institutional investors (FIIs) bought equities worth Rs 2,778.17 crore on Wednesday, according to exchange data.

The BSE benchmark climbed 354.45 points or 0.47 per cent to settle at an all-time high of 75,038.15 on Wednesday. The Nifty advanced by 111.05 points or 0.49 per cent to reach a record closing peak of 22,753.80. During the day, it jumped 132.95 points or 0.58 per cent to hit a lifetime intra-day peak of 22,775.70.

Stock markets were closed on Thursday on account of Eid-Ul-Fitr.