Bloodbath on Dalal Street as US inflation spooks global markets

Mumbai, May 12

The Sensex nosedived over 1,150 points while the Nifty crashed below the 16,000-level on Thursday, extending their losing streak to the fifth straight session, as world markets were unnerved by elevated US inflation which triggered concerns of accelerated rate hikes.

The forex market too bore the brunt of heightened risk aversion, with the rupee plunging to a fresh lifetime low of 77.63 per US dollar intra-day amid foreign capital outflows.

The 30-share BSE Sensex tumbled 1,158.08 points or 2.14% to finish at an over two-month low of 52,930.31. Similarly, the NSE Nifty tanked 359.10 points or 2.22% to 15,808. Barring Wipro, all Sensex constituents finished in the red.

IndusInd Bank lost 5.82%, followed by Tata Steel, Bajaj Finance, Bajaj Finserv, Axis Bank, HDFC Bank, HDFC, Titan and L&T. In value terms, HDFC twins and Reliance Industries were the top drags on the benchmark.

Global markets were hammered by a fresh wave of selling after US reported consumer inflation of 8.3% in April, slightly lower than the level in March but still way beyond the Federal Reserve’s target of 2%.

“Yesterday’s release of higher-than-expected US CPI data suggests that the inflationary pressure will persist in the near term. However, it is presumed to have peaked and will gradually decline in line with the ongoing fall in crude and other commodity prices, and slowdown in the economy.

“The Fed surprised the market with a hawkish stance, limiting liquidity, which limits further setbacks in the future. We can expect the market to stabilise as FIIs may reduce selling factoring inflation and Fed policy,” said Vinod Nair, Head of Research at Geojit Financial Services.

The BSE midcap gauge tanked 2.24% and smallcap went lower by 1.96%. — PTI

HDFC twins, Reliance top drags

• The forex market too bore the brunt of heightened risk aversion, with the rupee plunging to a fresh lifetime low of 77.63 per US dollar intra-day amid foreign capital outflows
• Barring Wipro, all Sensex stocks finished in the red
• In value terms, HDFC twins and Reliance Industries were the top drags on the Bombay Stock Exchange benchmark