Sensex tumbles over 1,600 points in three days on rising inflation woes

NEW DELHI: Taking the recent fall to the third straight day, the benchmark indices opened lower on Thursday amid persisting concerns over inflation and Fed rate hikes. The BSE Sensex lost the psychological mark of 60,000 while the NSE barometer Nifty50 was ruling below the 17,900 level.

Losses, however, were capped as oil prices dipped after a strong run-up this week and a rally in US bond yields and dollar stalled. Besides, positive exports data in Japan earlier in the day and a cut in key lending rate by the Chinese central bank for the second time in as many months lifted sentiment across Asian markets, which capped the downside for domestic stocks.

At 10.30 am, the BSE Sensex was trading 417 points or 0.70 per cent lower at 59,680. In the three sessions, the BSE barometer has lost over 1,600 points. The NSE Nifty was trading 103 points or 0.58 per cent, lower at 17,834 at the same time.

US benchmark 10-year note yields rose to a two-year high of 1.902 per cent on Wednesday before pausing and were last at 1.8611 per cent.

V K Vijayakumar of Geojit Financial Services noted a distinct bearish trend in the US market, wherein the Nasdaq Composite is down 10.7 per cent from its November 2021 highs while a broader Russel 2000 is ruling at 52-week lows.

"This need not translate into a similar trend for India, but investors have to be cautious since rising global inflation and the expected monetary tightening will be major headwinds for markets, at least in the first half of 2022. The situation might change in the second half if supply disruptions ease and inflation comes down," Vijayakumar said.

Among Sensex stocks, Infosys declined 1.75 per cent to Rs 1,835. HCL Tech and Tech Mahindra dropped 1.2 per cent each. Reliance Industries, Asian Paints, Wipro, TCS, and HDFC fell up to 1 per cent.

ICICI Lombard fell 5.95 per cent to Rs 1,340.65 after reporting a meagre 1.2 per cent growth in net profit at Rs 318 crore for the December quarter.

Bajaj Auto fell 0.7 per cent to Rs 3,419.70. The two-wheeler major reported a 17 per cent decline in consolidated profit after tax (PAT) at Rs 1,430 crore for the December quarter on lower sales.

CEAT plunged 4 per cent to Rs 1,086.70 after the tyre major reported a consolidated net loss of Rs 20 crore for Q3 due to muted demand.

Power Grid rose 2.69 per cent to Rs 210.15. UltraTech Cement, Tata Steel, Bharti Airtel, Axis Bank, and Maruti Suzuki added up to 1.2 per cent.

Tata Consumer Products rose 3 per cent to Rs 740 on Morgan Stanley's 'double upgrade' to the stock, citing changes in business fundamentals. The brokerage said growth levers are aligned, and stock correction offers a good entry point. Morgan Stanley upgraded its FY23 and FY24 EPS estimates by 5 per cent and 11 per cent, respectively.