Benchmark indices ended lower for a fourth straight day amid weak global cues and a surge in US treasury yields.
The better-than-expected consumer confidence data along with hawkish commentaries from US Fed officials led to a surge in US treasury yields to a one-month high at 4.55 per cent. Renewed tensions in West Asia pushed up Brent crude to $84.7.
Overseas investors pulled out ₹5,841 crore, taking the selloff figures in May in the cash market to over ₹40,000 crore. Volatility is expected to increase as election results draw near.
The Sensex ended at 74,502 on Wednesday, lower by 667 points, or 0.89 per cent, while Nifty closed at 22,704, down 0.8 per cent. Broader market indices fell lesser than the Nifty even as the advance-decline ratio improved to 0.74:1.
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Vinod Nair, Head of Research, Geojit Financial Services, said: “Weak global cues prompted investors to take profits ahead of the US core PCE data, a key gauge of inflation that is anticipated to rise. Soaring global inflation has diminished expectations of a US Fed rate cut in the near term. Broad-based weakness is being noticed across sectors with heavy underperformance from financials and IT.”
S&P Global Ratings raised India’s sovereign rating outlook to ‘positive’ from ‘stable’ while retaining the rating at ‘BBB-’.
Gainers, laggards
Hindalco was the top Nifty gainer on Wednesday, up 3.5 per cent, while HDFC Life (-2.9 per cent), SBI Life Insurance (-2.6 per cent) and Tata Consumer Products (-2.2 per cent) were the top losers.
Banking & Financials were key laggards with rating agency CRISIL estimating bank credit growth to moderate from 16 per cent in FY24 to 14 per cent in FY25 on high base effect and slower pace of GDP growth. Pharma and Metals ended in the green. Defence and ship building stocks saw buying interest amid reports of talks between India and France over Rafale Marine fighter jets.
Further downsides for the Nifty are likely once the immediate support of 22,685 is broken. Immediate resistance is at 22,826.
Global equities traded lower on Wednesday as higher bond yields and a surge in oil prices stoked concerns that interest rates will likely stay higher for longer. Almost all Asian indices fell, with Hang Seng and Kospi the top losers. European indices were trading deep in the red.