Markets Thursday ended lower and clocked their worst quarter since the early days of the pandemic, beset by fears that aggressive central bank policy aimed at curbing inflation could hurt the economy.
The NSE Nifty 50 index .NSEI closed 0.12% lower at 15,780.25, and the S&P BSE Sensex .BSESN slipped 0.02% to 53,018.94. The rupee INR=IN ended at a record closing low of 78.9675 against the dollar.
The indexes fell around 9.5% each in the quarter, their worst performance since the March quarter of 2020. Foreign investors sold Indian equities worth $13.81 billion in the quarter till June 29, the biggest outflow since at least 2008.
The Nifty Smallcap 100 .NIFSMCP100 and the Nifty Midcap 100 .NIFMDCP100 lost 19.1% and 10.9%, respectively, in the quarter.
The Reserve Bank of India has hiked interest rates twice in the quarter - once out of cycle. More hikes are expected with inflation above the central bank's tolerance band for a fifth straight month in May, as crude oil and commodity prices surged following the Ukraine conflict. Read full story
"As seen in past interest rate cycles, we may see markets take 6-8 months to stabilise from their first rate hike, and one year to gain back all their losses," said Gaurav Dua, head of capital market strategy at Sharekhan, adding that small cap stocks could see an extended period of pain.
"The next quarter won't be easy, we will likely see companies report the full effect of input cost pressures in their earnings."
The Nifty Metal subindex .NIFTYMET was the worst performer during the quarter, plunging 27.4%, including a 2% slide on Thursday.
The Nifty Auto index .NIFTYAUTO jumped nearly 11% in the quarter.
Zomato ZOMT.NS slid 6% on Thursday in its fourth straight session of losses since the food delivery firm announced an acquisition of grocery delivery startup Blinkit.