The two key equity benchmarks, Sensex and Nifty, on Thursday declined drastically amid high volatility after a promising start in early morning trade, a day after the US Federal Reserve hiked interest rates by 75 bps. The indices declined for the fifth-straight session as fears of recession hit investors’ sentiment globally.
The US Federal Reserve on Wednesday announced a 75-basis-point interest rate hike, its highest in more than a quarter of a century, to tame surging inflation. According to economists, the nearly 100-percentage point downward revision in growth forecast for 2022 hinted at ‘mild recession’.
The BSE Sensex eventually sank 1,045 points to 51,495, while the broader NSE Nifty closed at 15,360, down 331 points. The S&P BSE Sensex plunged 1,646 points from the day’s high to end at 51,495. It hit a low of 51,434 during the day.
On the 30-share BSE platform, except Nestle, all the other constituents were in the red. Nestle was marginally up by 0.30 per cent.
On the flipside, Tata Steel was the top loser, down 6.04 per cent. The other prominent losers were Wipro, Airtel, TechM, Kotak Bank, NTPC, and others.
The Nifty50 index hit a low of 15,344 during the day, before recovering marginally to close at 15,361, down 332 points.
In the broader markets, the BSE Midcap and Smallcap indices declined up to 2.87 per cent.
Amid fears of a global slowdown, the Nifty Metal index cracked 5 per cent, while the Nifty Realty, Auto, Bank, and IT indices dipped over 2 per cent each.
In previous session on Wednesday, the BSE benchmark settled 152 points (0.29 per cent) lower at 52,541, while the NSE Nifty declined by 39 points (0.25 per cent) to 15,692.15.
“The market is fearing that inflation is not going to come under control soon whereas a tight monetary policy may cause a recessionary situation,” said Santosh Meena, Head of Research at Swastika Investmart.
Meanwhile, the rupee on Wednesday had plunged 18 paise to close at a new all-time low of 78.22.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.13 per cent to 105.02.
Brent crude futures, the global oil benchmark, fell 0.25 per cent to $118.21 per barrel.
Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 3,531.15 crore, as per stock exchange data.