NEW DELHI: There seemed to be no respite for bulls on Tuesday as well as benchmark indices plunged sharply thanks to the risk-off mood in the global market and a rising dollar, which is leading to FPI outflow from India.
While Jerome Powell was widely expected to get reappointed as US Fed chair, the news saw Wall Street indices drop from intra-day highs, with the Nasdaq ending down more than 1 per cent owing to tech firms’ susceptibility to higher interest rates. This also dented the morale on Dalal Street.
“Domestic markets are likely to remain weak even after four days of continuous fall. Markets are unlikely to see a sharp recovery in the short-term until fresh positive triggers appear,” said Sageraj Bariya, Vice President – Institutional Sales, East India Securities.
How are bluechips doing
After opening in the red, benchmark indices pared some losses. At 9.32 am, BSE flagship Sensex was down 353 points or 0.60 per cent to 58,113. NSE benchmark Nifty declined 89 points or 0.51 per cent to 17,328.
In the 50-share pack Nifty, JSW Steel was the biggest gainer, up 1.90 per cent. Tata Steel, Tata Motors, Coal India, Indian Oil, ITC, Bajaj Finance, Asian Paints and Maruti Suzuki were among other gainers.
Infosys was the top loser in the pack, down 2.25 per cent. ICICI Bank, Wipro, HUL, Bajaj Auto, Reliance Industries, UltraTech Cement, Tech Mahindra and Dr Reddy’s Labs were among those that traded in the red.
FACTORS DRIVING MARKETS
Dollar on a high: The dollar index held near a 16-month peak after Biden on Monday nominated Fed Chair Powell for a second four-year term, bolstering bets the central bank might raise interest rates sooner to curb growing inflation. Higher dollar generally means more outflow from India.
Europe reels under Covid cases: Germany’s outgoing Chancellor Merkel said the latest surge is the worst experienced by the country so far, while Austria went into a fresh lockdown on Monday.
No need to shelve taper plans in Europe: A resurgence of coronavirus cases and a jump in inflation do not at this point warrant a change in the European Central Bank’s plans to taper its bond purchases in March, ECB policymaker Francois Villeroy de Galhau said on Monday.
Broader market indices were trading mixed, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.11 per cent while Nifty Midcap declined 0.22 per cent. The broadest index on NSE, Nifty 500 was down 0.62 per cent.
Indian Bank, Union Bank of India, SRF, Trident, KPIT Tech and Rain Industries were gainers from the space while JB Chemical and Pharma, Quess Corps, UTI AMC, Dr Lal Pathlabs, L&T Tech Services and Astral were under selling pressure.
MSCI’s gauge of Asia Pacific stocks outside Japan fell 0.49 per cent, while Hong Kong’s Hang Seng Index and China’s benchmark CSI300 Index opened 1.1 per cent and 0.2 per cent lower, respectively.
Australia’s S&P/ASX 200 outperformed with a 0.55 per cent gain, boosted by miners and energy stocks. Japanese markets were closed for a public holiday.