Bears kept a tight grip on the market with benchmark indices closed in deep red on Monday amid inflation concerns.
Market started off on a weak note as global markets plunged amid investor concerns over aggressive policy tightening by the US Federal Reserve following record-high inflation numbers in the United States. Market extended losses through the day, witnessing heavy selling across the board.
The BSE Sensex closed at 52,846.70, down 1,456.74 points or 2.68 per cent. It recorded an intraday high of 53,207.54 and a low of 52,527.08. The Nifty 50 closed at 15,774.40, down 427.40 points or 2.64 per cent. It recorded an intraday high of 15,886.15 and a low of 15,684.00.
Over 2800 stocks decline
The market breadth was in favour of the decliners with 2,839 stocks declining on the BSE as against 658 that advanced while 116 remained unchanged. Furthermore, seven stocks hit the upper circuit as compared to the five stocks that were locked in the lower circuit. Besides, 90 stocks touched a 52-week high level and 213 touched a 52-week low.
The volatility index rose 14.25 per cent to 22.37.
Only two stocks- Nestle India and Bajaj Auto closed in the green on the Nifty 50. Bajaj Finserv, Bajaj Finance, Tata Motors, IndusInd Bank and Hindalco were the top losers.
The Indian rupee dropped to a lifetime low amid rising yields, further impacting investor sentiments. The benchmark 10-year bond yield rose to its highest in over three years.
Investors are awaiting India’s inflation data. The FOMC policy outcome later in the week will be another major driver for the markets, as per analysts.
According to S Ranganathan, Head of Research at LKP securities, “Weak Global cues ahead of the Fed meet painted benchmark indices here in a sea of red as street awaits CPI data today on a day when the rupee hit a new low.”
“The risk off mode in equities globally after the US inflation print raised fears of an aggressive rate hike and the Dollar Index at 104 seem to weigh heavily amidst relentless FII selling despite local redemptions in May coming in at a two year low,” Ranganathan added.
According to Pankaj Pandey, Head – Research, ICICIdirect, “The global as well as Indian equities has witnessed sharp correction recently amid the worries over US inflation and possible aggressive Fed policy tightening while Covid-19 warning from Beijing has also added to concerns about global growth. Investors also await consumer inflation data in India.”
“On the equity market outlook, while we believe volatility may remain in the near term, the recent trough gives an opportunity to the long-term investors to load up on quality companies with sustainable growth visibility. On the medium term, we continue to remain constructive on domestic consumption, capital goods and allied space and domestic manufacturing plays,” added Pandey.
All in red
On the sectoral front, all indices closed in red.
Only two stocks- Nestle India and Bajaj Auto closed in the green were each down over 3.5 per cent. Nifty Bank, Nifty Financial Services and Nifty Realty closed over 3 per cent lower each. Nifty Oil & Gas was down nearly 3 per cent.
Broader market under pressure
Broader market also faced increased pressure.
The Nifty Midcap 50 was down 3.04 per cent while the Nifty Smallcap 50 was down 4.31 per cent. The S&P BSE Midcap was down 2.73 per cent while the S&P BSE SMallcap was down 3.15 per cent.