Indian equity benchmarks reversed a sharp rally in the previous session and started cautiously on Monday, tracking a fall in Asian stocks after another setback on Wall Street, as investors brace for a more aggressive tightening of financial conditions around the world. Ready, covering all recession risks. ,
Minutes of the latest meeting showed that the Reserve Bank of India’s Monetary Policy Committee (MPC) may rely more on the data while determining the country’s key interest rate as inflation is predicted to moderate.
Indian stocks did not benefit from that conservative tone of RBI.
The 30-share Sensex index fell 137.84 points to end at 57,782.13 in early trade. Similarly, the NSE Nifty-50 index fell 52.75 points to end at 17,132.95.
The top laggards among Nifty constituents were Mahindra & Mahindra, Adani Enterprises, JSW Steel and Larsen & Toubro.
On the other hand, winners of early trade included Bajaj Auto, State Bank of India, ICICI Bank and Eicher Motors.
Prashant Taapsee, Senior Vice President, Research, Research at Mehta Equities told PTI, “Voltality is likely to be identified as Nifty bulls brace for a rough session in the near term as things are not very good on Dalal Street right now. Looking.” ,
Both the benchmarks indicate a sea of red in the Asian markets. Stocks fell in Hong Kong, Australia and Japan, led by technology companies.
The S&P 500 and Nasdaq 100 contracts rose after falling on Friday, when Treasury rates rose as inflation forecast for the coming year.
Global stocks have been hit by concerns about the world economy and increased demand for safe-haven assets as the Federal Reserve sharply raised interest rates this year to curb rising inflation, which has driven capital back to the United States. Took and raised the value of the dollar.
While the S&P is 25 percent off its peak, BofA economist Jared Woodard warned that the slide was not over, as the world was transitioning from two decades of 2 percent inflation to something more like 5 percent inflation, Reuters reported. Gave.
“The $70 trillion in ‘new’ technology, development, and government bond assets worth 2 percent of the world is vulnerable to these secular changes as ‘old’ industries, such as energy and materials, reverse decades of low investment,” said Mr. Woodard. wrote in a note.
“Walking through a 60/40 proxy and buying what’s scarce — electricity, food, energy — is the best way for investors to diversify,” he said.
As the Bank of England’s (BoE) emergency buying spree now turns all attention to UK bonds, concerns about financial stability add to the toxic mix.
“BoE was doing emergency bond-buying that is technically the same as QE, while raising the policy rate with another,” analysts at ANZ said in a note.
“Monday’s market action will provide a test for the existence of the truss’s low-tax vision and its political future.” As everyone turns their attention to UK bonds, now an emergency buyout of the Bank of England (BoE), worries about financial stability are added to the toxic mix.
Investors should deal with news from Beijing, where President Xi Jinping said China’s global power had strengthened while issuing warnings of an impending “dangerous storm”.
There were some indications that the Covid-Zero campaign or the housing market regulations that are straining the economy would ease. Mr. Xi also said that despite growing hostility with the US, China will win in its struggle to develop critical technology.
On other market news, oil recovered some of its losses after a weekly decline as concerns about an economic slowdown clouded the demand outlook.
Gold prices in Asia stabilized after an early week of appreciating the dollar on speculation of a more aggressive Fed rate hike.