After experiencing a four-day high, the key Indian equity benchmarks lost momentum and slumped on Thursday amongst the massive Covid outbreak in the country causing weakness across global markets.
Third Wave Affecting Indian Markets
To be specific, the BSE Sensex and NSE Nifty opened sharply lower and were down 0.9 percent in Thursday’s early morning trade.
The NSE Nifty plunged 179.35 points (1 percent) to 17,745.90 at the same time, the 30-share BSE index ended 621.31 points (1.03 percent) lower at 59,601.84.
Further, the global stocks spiraled lower after minutes of the Federal Reserve’s recent meeting, According to PTI.
This seems to be an indication of the probable hike in interest rates by the US central bank to cool off inflation faster, said traders.
The top loser includes Tech Mahindra shedding over 2.5 percent, followed by UltraTech Cement, Reliance Industries, HCL Tech, HDFC, Kotak Bank, HDFC Bank, and TCS in the Sensex pack.
At the same time, some gainers emerged such as IndusInd Bank, Bharti Airtel, Maruti, Titan and Bajaj Finance.
Interestingly, out of 15, 11 sector gauges, compiled by the NSE, settled in the red.
Similarly, Nifty IT, Nifty Financial Services, and Nifty Bank also cracked as much as 1.55 percent.
Although, the broader markets outperformed their large-cap counterparts.
Other indexes like BSE Midcap index ended just 0.05 percent down, on the other hand, the BSE Smallcap index grew by 0.01 percent.
Improving US Job Market
With all this happening, policymakers believe the US job market is healthy enough and ultra-low interest rates are no longer needed, as per the US Fed minutes from its December 14-15 policy meeting.
In a research note, Reliance Securities said, “…quicker than previously anticipated rate hike from the US Fed could witness outflows from the domestic markets and could weigh on sentiments,”.
It seems that bourses in Shanghai, Seoul and Tokyo ended with significant losses following a massive sell-off in the US markets.
Contrary to this, Hong Kong closed in the green.
At the same time, the stock exchanges in Europe also witnessed intense selling pressure in mid-session deals.
During this time, the international oil benchmark Brent crude rose 0.25 percent to $81 per barrel.
Coming to the capital market, Foreign institutional investors remained net buyers on Wednesday.
They have purchased shares worth Rs 336.83 crore, as per the exchange data.
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