‘Rising inflation fears gripped the domestic market, leading to heavy sell-off ahead of the release of U.S. inflation data and the Fed policy meet next week’

‘Rising inflation fears gripped the domestic market, leading to heavy sell-off ahead of the release of U.S. inflation data and the Fed policy meet next week’

Indian equities on Friday came under selling pressure following worries around inflation and rising interest rates in the U.S. and Europe.

The S&P BSE Sensex plunged 1,016.84 points, or 1.84%, to 54,303.44. Stocks that lost the most include Kotak Bank (3.96%), Bajaj Finance (3.9%), HDFC (3.8%), Reliance (3.02%), Wipro (2.99%) and Tech Mahindra (2.51%).

The NSE Nifty-50 index too slid 1.68% to 16,201.80 points.

“Rising inflation fears gripped the domestic market leading to heavy sell-off ahead of the release of U.S. inflation data and the Fed policy meet next week. Inflation data will be crucial to sense the quantum of a rate hike,” Vinod Nair, head of research at Geojit Financial Services said.

“European Central Bank in its policy meeting signalled [it would] the start rate hikes from next month and [indicated] a large change in September. Persistent foreign fund outflow and widening trade deficit due to the elevated oil prices led to depreciation of the rupee, weakening the sentiment,” he added.

According to Ajit Mishra, vice president- Research, Religare Broking Ltd., the markets will continue to take cues from global peers in the absence of any major domestic event.

“First, participants will react to the U.S. inflation data and upcoming macroeconomic data (IIP, CPI & WPI) will also be in focus. While the index is gradually inching lower, a mixed trend on the sectoral front is offering opportunities on both sides so traders should align their positions accordingly,” he said.



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