Monday Mayhem on Dalal St

Mumbai: Dalal Street sank in a sea of red on Monday, mirroring a meltdown in global equities, as investors braced for steeper rate hikes by the Federal Reserve after US consumer inflation soared to a four-decade high. Unabated foreign fund outflows and the rupee breaching the 78-mark against the US dollar for the first time ever further soured risk appetite. Extending its losses to the second straight session, the 30-share BSE Sensex plummeted 1,456.74 points or 2.68 per cent to finish at 52,846.70. The broader NSE Nifty tanked 427.40 points or 2.64 per cent to 15,774.40 points.

Investor wealth tumbled by over Rs6.64 lakh crore in Monday's session, with the market capitalisation of all BSE-listed firms dropping to Rs2,45,19,673.44 crore (Rs245.19trn).

Bajaj Finserv was the top loser in the Sensex pack, skidding 7.02 per cent, followed by Bajaj Finance, IndusInd Bank, Tech Mahindra, ICICI Bank, TCS, NTPC, Infosys and SBI. Nestle India was the sole gainer among Sensex constituents, inching up 0.46 per cent. "Domestic equities witnessed a steep fall on account of weak global cues...Further, rupee at record low amid volatile crude oil prices. Global markets saw sharp sell-off after the US consumer inflation for May'22 accelerated to a four-decade high of 8.6 per cent.

"On the domestic side depreciating INR and consistent FII selling are aggravating the pressure on markets," said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services Ltd.

"Weak global cues ahead of the Fed meet painted benchmark indices here in a sea of red as street awaits CPI data today on a day when the rupee hit a new low. The risk-off mode in equities globally after the US inflation print raised fears of an aggressive rate hike," said S Ranganathan, head (research) at LKP Securities.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,973.95 crore on Friday, as per exchange data.

The US Fed will announce its policy decision later this week, with analysts expecting rate hikes well into next year to tame rising prices amid geopolitical volatility.

In the broader market, the BSE smallcap gauge tanked 3.15 per cent and the midcap index declined by 2.73 per cent. All BSE sectoral indices ended lower, with IT tumbling 3.92 per cent, followed by teck (3.45 per cent), metal (3.39 per cent), industrials (3.35 per cent), finance (3.17 per cent) and bank (3.12 per cent). A total of 2,839 stocks declined, while 658 advanced and 116 remained unchanged.

Elsewhere in Asia, markets in Seoul, Tokyo, Hong Kong and Shanghai settled with deep cuts after China reported a fresh surge in COVID-19 cases. Markets in Europe were also facing heavy selling pressure in mid-session deals. Wall Street had ended sharply lower on Friday after the release of consumer inflation data for May. Meanwhile, international oil benchmark Brent crude fell 0.98 per cent to $120.75 per barrel. The rupee plunged 20 paise to close at an all-time low of 78.13 (provisional) against the US dollar on Monday.