Sensex declines 344 points; Nifty slips below 17K

Tracking a relief rally on Wall Street after US inflation data delivered no nasty surprises, Indian equity indices opened in the green but reversed early gains to end in the red for the 5th day on the trot on Wednesday. Selling pressure was seen in banking, financial and IT stocks.

The 30-share BSE benchmark Sensex declined 344 points or 0.59% to settle at 57,556. The broader NSE Nifty dropped 71 points or 0.42% to end at 16,972.

"The in-line data showing a decline in US inflation provided a gap-up opening in context with the global relief rally, bringing confidence that the Fed would not opt for a harsh rate hike following the turmoil in the banking sector," said Vinod Nair, Head of Research at Geojit Financial Services.

Domestic gains were short-lived, as European markets fell on fears that the ECB would raise interest rates by at least 25 bps at its meeting on Thursday, said Nair. High interest rates are the worry of the stock market, he added.

Global Markets
Asian equities rose on Wednesday, tracking a relief rally on Wall Street after US inflation data reinforced hopes that the Federal Reserve will likely go for a smaller rate hike when it meets next week.

Chinese shares gained with Shanghai Composite Index rising 0.55%, while Hong Kong's Hang Seng index was up 1.52%. Australia's S&P/ASX 200 index rose 0.86%, while Japan's Nikkei was flat.

European stocks slipped 0.9% in early trade but held above three-month lows reached on Monday as panic gripped world markets following SVB's collapse last week.

Crude price rises
Oil rose almost 1% on Wednesday, after hitting a three-month low in the previous session, as Chinese economic data bolstered hopes for a demand recovery and concerns about a fresh financial crisis eased in the wider markets.

China's economic activity picked up in the first 2 months of 2023, figures showed on Wednesday, as consumption and infrastructure investment drove recovery, following the end of strict COVID-19 containment measures.

Brent crude climbed 0.7%, to $79.99 a barrel. US West Texas Intermediate crude futures (WTI) gained 1.1% to $72.09.

Rupee Weakens
The Indian rupee failed to hold on to its positive opening versus the US currency on Wednesday, slipping below 82.50 on dollar demand from foreign banks and importers, traders said.

The rupee last traded at 82.59 against the dollar, compared with 82.49 in the previous session. The local currency had opened at 82.31.

(With inputs from agencies)