Sensex, Nifty under pressure as inflation concerns weigh investor sentiment

NEW DELHI: Domestic stocks were trading lower on Tuesday after the US central bank Chair Jerome Powell said the Fed would hike rates by 50 basis points on multiple occasions, if required, to tame inflation.

The 10-year bond yield in the US hit the 2.3 per cent mark overnight following Fed comments. Oil prices jumped 2 per cent in Tuesday's trade.

Back home, prices of diesel and petrol were hiked after 137 days, though marginally. That added to concerns over the prevailing inflation.

At 9.49 am, the BSE Sensex was trading lower by 179 points at 57,114. Nifty50 was quoting at 17,073, down 44 points or 0.26 per cent.

"The outlook for global GDP growth has deteriorated significantly as inflation challenges intensify and Russia’s invasion of Ukraine threatens global energy supplies. Fitch Ratings’ March 2022 Global Economic Outlook sees world GDP growth reduced by 0.7 per cent in 2022 and sharp upward revisions to inflation forecasts," Fitch Ratings said on Tuesday.

Fitch said it expects the repo rate in India to rise to 4.75 per cent by December from 4 per cent currently.

Among Sensex stocks, FMCG stock fell the most. Hindustan Unilever declined 2.4 per cent to Rs 2,002. Nestle India fell 1.36 per cent to Rs 17,625. Asian Paints fell 0.7 per cent to Rs 721. ITC edged 0.2 per cent lower. Foreign brokerage Jefferies has cut earnings estimates of consumer companies by 1-10 per cent as a possible delay in recovery of gross margins, weakness in volume growth and margin compression are likely to weigh on the sector companies.

Ultratech Cement declined 1.4 per cent to Rs 6,106. IndusInd Bank, HDFC Bank, M&M, ICICI Bank and L&T fell up to 1.4 per cent. On the upside, Tata Steel added 1.7 per cent to Rs 1,327. Wipro, Power Grid, Reliance Industries, TCS and HCL Tech rose up to 1 per cent.