Sensex and Nifty on Friday faced a significant one per cent decline due to a broad-based selloff as the investor sentiment was dampened by US CPI inflation data, which dashed hopes of a June rate cut and led to a surge in treasury bond yields.
The Sensex was down 793.25 points or 1.06 percent at 74,244.90, and the Nifty was down 234.40 points or 1.03 percent at 22,519.40.
BSE Midcap index closed 0.49 per cent lower while the Smallcap index ended 0.60 per cent down. Nifty Midcap 100 and Nifty Midcap 150 hit their respective record highs in today’s session.
Almost all the sectoral indices closed in the red. Nifty Pharma and Nifty Healthcare were the worst hit as they were down 1.8 and 1.5 per cent, respectively. Nifty Media, Nifty PSU Bank, and Nifty FMCG closed over 1% lower each.
Other big losers were the Financial Services down 0.86 per cent, IT index down 0.73 per cent, and Auto index down 0.62 per cent.
The Consumer Durables index was down 0.89 per cent, while the Metal and Realty indices were down 0.48 per cent, and 0.94 per cent, respectively.
Only five stocks – Divi’s Labs, Bajaj Auto, Tata Motors, TCS and Nestle – ended in the green in the Nifty 50 index.
Sun Pharma, Maruti, Power Grid, Titan and ONGC ended as the top losers among the 45 stocks that ended in the red.
The overall market capitalisation of BSE-listed firms dropped to nearly Rs 399.7 lakh crore from nearly Rs 402.2 lakh crore in the previous session, making investors poorer by about Rs 2.5 lakh crore in a single session.
Further, a long buildup was seen in IRCTC, Metropolis Healthcare, Syngene International, and Bharat Electronics while a short buildup was seen in Sun Pharmaceutical Industries, Page Industries, Laurus Labs, and Zydus Lifesciences.
Aarti Industries, ABB India, Aegis Logistics, Bharat Electronics, Cummins India, Eicher Motors hit their 52-week highs on the BSE among others.
Experts believe that the Indian equity benchmarks fell sharply driven down by global market mood, as high US consumer price inflation data damaged potential of an early rate cut by the Federal Reserve.
In the global landscape, the European stocks rallied the most in a month as simmering Middle East tensions pushed commodities higher and the prospect of euro-area interest-rate cuts boosted sectors sensitive to borrowing costs.
The Stoxx 600 index advanced 1.1 per cent, with mining, energy and technology stocks leading the gains.
US equity futures were steady following strong gains on Wall Street.
With the stronger dollar and lower chances of a rate cut from the Fed, central banks across Asia will want to maintain some differential in their interest rates, or else the countries will see weaker currencies and higher imported inflation.
Other developments, such as surging crude prices, heightened geopolitical risks, higher rice prices feeding into rising food inflation have also sent alarm bells ringing across Asian banks.