Benchmark indices fell nearly three per cent on Monday, tracking negative global cues. BSE Sensex and NSE Nifty started off on a weak note amid investor concerns over aggressive policy tightening by the US Federal Reserve following record-high inflation numbers released on Friday.

The stock market has been in red since then as investors await consumer inflation data later in the day. 

At 1 pm, the BSE Sensex was trading at 52,774.54, down 1528.9 points or 2.82 per cent. It recorded an intraday high of 53,207.54 and a low of 52,734.98. The Nifty 50 was trading at 15,760.15, down 441.65 points or 2.73 per cent, near the day’s low of 15,749.90. It recorded a intraday high of 15,886.15.

The volatility index rose 12.69 per cent to 22.06

Santosh Meena, Head of Research, Swastika Investmart said, “The record-high inflation numbers in the US have triggered a huge sell-off in the global equity markets. The markets expect Fed to become more aggressive to tame the entrenched inflation....and this will lead to huge outflows of FIIs’ and FPIs’ money and further depreciation of the rupee.”

The Indian rupee dropped to a lifetime low amid rising yields. The benchmark 10-year bond yield rose to its highest in over three-year period.

“Inflation jitters continue to haunt global markets. We suspect Nifty will lack direction in the afternoon session as the key driver of sentiment hinges now on,” said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.

According to Tapse, drivers for the market include the FOMC policy Outcome, spike in the US 10-year Treasury, India’s CPI inflation and WPI inflation data.

“A hot inflation reading is bolstering expectations that the Federal Reserve will continue to aggressively hike rates in the second half of this year, even with signs of economic slowdown,” said Tapse. 

Sectoral indices

On the sectoral front, all indices were trading in deep red.

Nifty IT, Nifty Private Bank and Nifty PSU Bank were down nearly 4 per cent each. Nifty Bank was down 3.5 per cent. Nifty Financial Services and Nifty Metal were down over 3 per cent each. Nifty Realty was down nearly 3 per cent, while Nifty Oil & Gas was trading nearly 2.5 per cent lower. 

Broader market

Broader market, too, faced increased pressure. The Nifty Midcap 50 was down 2.92 per cent, while the Nifty Smallcap 50 was down 3.65 per cent. The S&P BSE Midcap was down 2.50 per cent, while the S&P BSE Smallcap was down 2.61 per cent.