Sensex slips over 180 points on macro vulnerabilities

NEW DELHI: Stocks on Dalal Street were trading lower in Tuesday's trade as the EU imposed fourth round of sanctions against Russia and as investors turned cautious ahead of the outcome of two-day US Fed policy meeting beginning later in the day.

February's retail inflation print, which came in above the RBI's comfort zone at 6.07 per cent, above a poll estimate of 5.93 per cent, also weighed on the sentiment.

At 9:54 am, the BSE Sensex was trading at 56,306, down 180 points or 0.32 per cent. Nifty50 was quoting at 16,828, down 43 points or 0.26 per cent.

Among Sensex names, Maruti Suzuki added 1.6 per cent to Rs 7,430. Asian Paints, M&M, UltraTech Cement and ITC added up to 1.6 per cent. HDFC, Bharti Airtel, Sun Pharma, Titan Company and Axis edged higher.

Losers included Tata Steel, Kotak Mahindra Bank, Infosys, NTPC and Reliance Industries which declined up to 2.4 per cent.

"With inflation above 6 per cent, the current account deficit at nearly 4 per cent of GDP, extreme fiscal stress and an uneven growth recovery, we project a sharp rise in macro vulnerabilities," said Nomura India in a note.

Nirmal Bang said it expects the RBI to shift to a ‘neutral’ stance in either April or June policy meet and that it sees a possibility of a repo rate hike in June. "However, we are not factoring in rate hikes of more than 50bps in FY23 as growth concerns also persist," it said.

Globally, the US Federal Reserve was likely to raise interest rate by 25 basis points at its meeting, with investors eyeing cues about the pace of future rate hikes. There is a 70 per cent chance of a larger 50 basis point hike at the subsequent meeting in May, as per CME's Fedwatch tool.

Also capping the upside on Dalal Street were concerns over the fresh set of sanctions against Moscow for its invasion of Ukraine. The sanctions targeted individuals and entities. The EU also approved a declaration to the World Trade Organization on suspending the application of the most-favored-nation clause for Russia and suspending the examination of Belarus' application for accession to the WTO.