Sensex plunges over 215 points, extends losses for fourth straight session

Indian equity benchmarks declined on Wednesday, extending losses for a fourth straight day after the Reserve Bank of India hiked rates at a more modest pace but downgraded its growth outlook, even as it also said that the fight against inflation was not over yet.

The 30-share BSE Sensex index declined 215.68 points, or 0.34 per cent, to close at 62,410.68, and the broader NSE Nifty-50 index fell 82.25 points, or 0.44 per cent, to 18,560.50.

After seeing-saw between gains and losses in early trade on Wednesday, both indices fell as the RBI hiked rates for the fifth time in a row and warned that inflation prospects have peaked, are still elevated and central bank price pressures. Focusing on bringing Below

Equity benchmarks have fallen for four straight days after an eight-day bull run, including record closing streak for six consecutive days.

The index had moved to an all-time high on recent signs of easing inflation and easing crude oil prices, which is beneficial for India, a significant crude importer.

But they have fluctuated in the past three sessions on the back of an RBI meeting and solid US data, which dampened hopes that the Federal Reserve would ease the rate hike cycle.

Global sentiment for risk assets was also gloomy.

Investors tempered their enthusiasm about China’s reopening as reality chewed into expectations of a soft economic landing in the United States, stalling a rally in world stocks.

Overnight, the S&P 500 fell for the fourth session in a row, snapping a nearly two-month losing streak. Brent futures are now trading around $79.50 a barrel, about where oil was at the start of the year.

“Some of the optimism that had driven the rally is being put to the test,” Shane Oliver, head of investment strategy at Australia’s AMP, told Reuters.

“We can transition from a situation of worrying about inflation and interest rates to one where negative growth is waning and profits are falling,” he said.

With rising rates and inflation threatening consumer demand, big banks in the US are bracing for a weaker economy in 2019. In their Tuesday speeches, senior executives from Goldman Sachs, JPMorgan and Bank of America all sounded bleak.

“Economic growth is slowing,” Goldman Sachs CEO David Solomon told Reuters. “When I talk to my clients, they seem extremely alert.”

In reaction to those fears about growth, long-term bonds rose, and the safe-haven dollar was able to reverse some of its previous losses.

Chinese stocks in Hong Kong experienced a late slump due to investor perception that the road to reopening will be difficult and the prospect of an economic rebound uncertain.

Market investors were quick to book profits after occasional rallies as questions still loomed over the reopening of Asia’s biggest economy.

Even though senior officials are debating the target of roughly 5 per cent growth, there are concerns about a projected increase in infections and greater economic disruptions in the coming year.

“While the market is still trading on positive expectations, we are not completely out of the woods, as we still have to get over the panic that followed the first wave of infections,” said Ma Juzhen, a fund manager at Longquan Investments. can come along.” management, told Bloomberg.

Weak trade data, including a sharp decline in China’s exports and imports in November, fueled negative sentiment.

According to Bloomberg, economists at Macquarie International Services, including Larry Hu, wrote in a research note that “uncertainties remain high”, particularly about how disruptive the exit from Covid Zero could be and whether policymakers would consider the economy Willing to take advantage of.

There was not much enthusiasm for riskier assets in the world of European stocks on Wednesday, with Wall Street shares trading lower again in Asian stocks as markets adjusted to a progressively higher interest rate hike.

In commodities, Brent crude futures fell 0.6 per cent to $78.86 a barrel after falling below $80 for the second time in 2022 during the previous trading session. Spot gold was steady at $1,772 an ounce.

In the digital currency market, bitcoin fell 1.6 percent to below $17,000, with fragile sentiment as the effects of the FTX collapse spread across the industry.