₹6 lakh crore investor wealth gone in minutes, NCLAT upholds CCI order against Amazon and more: Mint Mid-Day Digest
Equity investors became poorer by nearly 6 lakh crore today with the Sensex plunging over 1,500 points amid a global selloff. Indian shares fell sharply and the rupee hit a record low, as US inflation data and a COVID-19 warning from Beijing roiled global markets, with traders in Asia’s third-largest economy waiting for May consumer price data for further cues. The NSE Nifty 50 index was down 2.5% at 15,785 in latest trade.
The Fed policy decision is due later this week. And analysts expect aggressive rate hikes by the US central bank as May data showed inflation hitting a 40-year high.
“The near-term market trend is weak. The May US inflation print at 8.6% against the market expectation of 8.3% is likely to turn the Fed more hawkish with a series of 50 bps rate hikes taking the terminal rate by mid-2023 above 3.5%. Such a scenario would be negative for risky assets like equity, particularly in the context of declining global growth,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The Indian Market will stabilize only when the US market stabilizes. Therefore, investors may wait and watch till clarity emerges on the market trend. One silver lining is the 7.1% increase in IIP which indicates that the Indian economy is doing well. Therefore, long-term investors can use the dips in the market to buy high-quality economy-facing stocks like capital goods, banking, telecom, and export segments,” he added.
The rupee today touched a lifetime low of 78.28 to the dollar while the benchmark 10-year bond yield hit 7.60%, its highest since February 2019.
All eyes are now on India’s retail inflation data due later in the day. A Reuters poll found that the consumer price index slipped modestly in May, but stayed well above the Reserve Bank of India’s upper tolerance limit for a fifth consecutive month.
