Shares slide sharply on Dalal Street, indices end at nearly 1-year low

Shares slide sharply on Dalal Street, indices end at nearly 1-year low

By Reuters

  • 13 Jun 2022
Credit: Reuters

Markets sank more than 2.5% on Monday and the rupee hit an all-time low as growing fears of aggressive policy tightening by the US Federal Reserve roiled investor sentiment in the run-up to domestic inflation data.

The Nifty ended down 2.6% at 15,774.40, its lowest level since July 2021, while Sensex fell 2.7% to 52,846.70.

All eyes are on inflation data due later in the day. The consumer price index likely slipped modestly in May, but stayed well above the Reserve Bank of India's upper tolerance limit for a fifth consecutive month, according to a Reuters poll.

"The Indian market's valuations continue to be uninspiring, especially of consumption sectors and 'quality' stocks," said Shrikant Chouhan, head of equity research (retail) at Kotak Securities.

"Financials remain one of the few patches with reasonable valuations, but they too will struggle if India's macro-economic position was to deteriorate further."

Global peers were also lower on worries that the Fed would tighten its policy more aggressively after data released last week showed the US consumer price index hit its highest in over 40 years last month.

Under pressure from a strong dollar, the rupee hit a record low of 78.28 to the greenback, while the benchmark 10-year bond yield rose to a more than three-year high of 7.60% as investors dumped emerging market bonds.

Leading sectoral losses in Mumbai trading, information technology stocks on the Nifty dropped 4.1%. Sector heavyweights Infosys Ltd and Tata Consultancy Services fell 3.5% and 4.2%, respectively.

Bajaj Finserv and Bajaj Finance were the top losers on the NSE, declining about 7% and 5%, respectively. Nifty Bank sank 3.1%.