Sensex, Nifty Off Day’s Low; European Markets Decline

India’s stock benchmarks declined, dragged by losses in information technology, consumer durables, realty and banking stocks, amid weak global cues.

The S&P BSE fell 1.2% to 58,217.56. The 30-stock gauge lost over 1,000 points to an intraday low of 57,914.10. Today’s intraday loss is the second worst this week for Sensex.

The NSE Nifty declined by similar magnitude to 17,399. The 50-stock gauge fell to 17,303 in intraday trade.

The broader markets almost mirrored their larger peers. Barring S&P BSE Metal, all the other 18 sectoral indices compiled by BSE Ltd. declined with S&P BSE Information Technology and Teck shedding over 2%.

The market breadth was skewed in the favour of bears. About 938 stocks advanced, 2,281 declined and 110 remained unchanged.

“U.S. inflation has hit a multi decade high of 7.5%, which has implications on the pace of interest rate increase by the US Fed. As we suggested earlier, this will lead to higher volatility in all financial markets, including equity, debt, and currency. We expect emerging market currencies to be under pressure, including the rupee. We also expect Indian interest rates to increase despite dovish RBI yesterday. This will have implications for equity investors”, Naveen Kulkarni, Chief Investment Officer at Axis Securities wrote in a note. He added, “we expect this increased volatility to hit small / midcaps more than large caps. We believe that the expected increase in volatility should be used by investors to build positions in quality large-cap and midcap stocks. Some of the sectors where we remain positive are Banking, including quality PSU Banks, commodities, real estate, capital goods, and healthcare”.