Sensex drops over 200 points, extends losses for third straight day

Indian equity benchmarks fell on Tuesday, extending losses for the third straight session after an eight-day bull run that included record closes for six consecutive days.

Domestic shares mirrored sharp declines in global risk assets Asian shares posted their biggest decline in two weeks after strong US economic data suggested the Federal Reserve could hike its aggressive interest rate for a longer period than previously expected Is.

The BSE Sensex index ended 208.24 points, or 0.33 per cent, lower at 62,626.36, and the broader NSE Nifty fell 58.30 points, or 0.31 per cent, to close at 18,642.75.

The Sensex opened at 62,834.60 on Tuesday with a low of 62,390.07 and a high of 62,677.84.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 1.4 percent, its biggest decline since Nov. 21, after climbing to a three-month high in the previous session.

Stock prices fell 1.6 percent in Taiwan, 1.1 percent in Hong Kong and 1 percent in Korea. China’s stock market continued to improve, with the overall index rising 0.6 percent, while Japan’s stock market gained 0.3 percent.

“The black swan in the room is the risk of the Fed being too late again, but this time cutting rates,” Howard Chee, head of research at hedge fund Quarz Capital Asia, told Reuters.

“Monetary policy operates with a lag,” said the research head, adding that declining housing prices, rental rates, commodity and freight pricing, as well as rising layoffs and inventories signal an already weak US economy. Giving.”

Following a third day of losses for the S&P 500 and heavy selling on Monday, the index’s contracts soared on Tuesday. An indicator of European shares swung between gains and losses as the seven-week bounce began.

A strong US economy and persistent inflation, and money market futures and economists believing the Fed will need to raise rates more than initially anticipated, dampened optimism about the reopening in China. Used to be.

“I think we still haven’t gone through the volatility that we’re going to see,” Hannah Gooch Peters, global equity investment analyst at Sanlam UK, said in an interview with Bloomberg TV. “Inflation is not under control right now.”

Meanwhile, in what is being seen as a quick move towards rolling back the Covid Zero policy, Beijing announced that it will eliminate Covid testing requirements for most public places.

As Bloomberg reports, strategists at Mizuho International Plc wrote in a note to clients, “If growth continues to fuel optimism about the 2023 Chinese reopening, Asia could enjoy some degree of positive momentum.” Huh.”

Chinese equities have rallied recently, but they have been among the worst performers in Asia so far this year.

“We are taking a ‘dips by the dips’ approach to increase our allocation as we believe the full reopening of Chinese borders is expected to take place by mid-February,” said head of research at hedge fund Quarz Capital Asia. Will happen.” Investment firms were generally bullish on Asian equities.

A separate Reuters report showed foreign net monthly inflows into Asian stocks hit a two-year high in November. Sentiment was also boosted by hopes that China would eventually relax its zero-Covid policy and open up its economy.

Foreign investors bought shares worth a net $15.18 billion in November, the most since November 2020, according to data from stock exchanges in Taiwan, India, the Philippines, Vietnam, Thailand, Indonesia and South Korea.

In the oil market, after the G7 price cap on Russian marine oil came into effect on Monday, apart from EU ban on Russian petroleum imports by sea, crude prices fell by more than 3 per cent in the past. have grown rapidly. session.