The equity benchmarks ended the holiday-truncated week on a weaker note tracking the weakness in global markets and a sharp rise in bond yields. Key economic data in the US and India made investors jittery on Wednesday, said market watchers. India’s CPI rose to a 17-month high in March at 6.95% from 6.07% in February.
Paring initial gains, the Sensex ended lower by 237.44 points or 0.41% at 58,338.93. The broader Nifty-50 ended 54.65 points lower at 17,475.65. As the index slipped below 17,500 on Wednesday, analysts believe that if it falls further, the 17,287-17,330 band could provide support, while on the upside, 17,639-17,784 band could offer resistance over the next few days.
Equity markets were negative today as March inflation spiked to a 17-month-high level. After trading in green for a while, the Nifty erased its gains and ended near day’s low levels with loss of 55 points (-0.3%) at 17,476… Global markets were trading mixed as US inflation hit 40-year high to 8.5% in March. Gains were also capped on account of pressure from rising cases of COVID-19 in China and failing peace talks between Russia and Ukraine,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services.
Foreign portfolio investors turned net sellers in the last three trading sessions. On Wednesday, FPIs sold shares worth Rs 2,061.04 crore, while local institutional investors bought shares worth Rs 1,410.85 crore. Experts believe that escalating worries over inflation and tightening of the monetary policy will lead to further outflows from foreign investors.
VK Vijayakumar, chief investment strategist, Geojit Financial Services, said: “Inflation in the US at 8.5% in March, dollar index above 100 and the imminent monetary tightening by the Fed, which might lead to recession, are negatives for global equity markets. In India, the March inflation print has come above estimates at 6.95%. This will push the 10-year yields up. Since only some of these negatives are discounted by the market, there can be more selling, particularly by FIIs, who have again turned big sellers.”
The overall market breadth, however, remained positive as out of the 3,529 stocks traded on the BSE, 1,815 advanced. HDFC twins were the top contributors to the Sensex’s fall. Among sectors, nine out of the 15 sector gauges on the NSE ended in the red, with the Nifty Bank and Auto being the worst performers, falling 0.7% and 0.8%, respectively.
