Sensex crashes 700 pts: US inflation and 4 other factors at play
Synopsis
Price growth dropped to an annual rate of 3.1% in January, according to official data; above economists’ expectations of 2.9%. In December, the consumer price index stood at 3.4%.
Price growth dropped to an annual rate of 3.1% in January, according to official data; above economists’ expectations of 2.9%. In December, the consumer price index stood at 3.4%.
Nifty Bank, Financial Services, IT, Pharma, and Healthcare fell 1-2% in early trade. While Nifty Auto, FMCG, Media, Realty, Oil & Gas also opened lower.
Adani Green Energy shares rose nearly 4% after Moody’s Investors Service revised its outlook from “Negative” to “Stable”.
National Aluminium Company shares traded 4% higher after the firm's net profit jumped 84% year-on-year to Rs 470 crore in the third quarter. Revenue from operations increased 2% to Rs 3,347 crore.
Here are top factors that aided the stock market crash today:
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1. Global markets fall after hot US unflation data
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8% in early Asia trade and was headed for a fifth straight day of losses. Even Japan's standout Nikkei was not spared from the beating and fell 0.7%.
2. Dollar and Treasury yields gain
The 10-year U.S. Treasury yield hit a 2-1/2-month high, and the dollar touched a three-month peak against the yen on Tuesday after data showed U.S. inflation slowed less than expected in January.
The dollar index also touched a three-month high. It was last up 0.68% at 104.86, while the euro was down 0.58% at 1.0709.
3. FPIs remain net seller
FPIs sold Rs 2,524 crore of shares in February, after offloading stocks worth Rs 25,744 crore in January, according to National Securities Depository data.
However, domestic institutional investors (DIIs), who bought stocks worth Rs 274 crore on Tuesday, are on course to extend their buying streak for the seventh month in a row.
4. Profit booking in broader market
Volatility will remain elevated as stretched valuations are likely to trigger bouts of profit booking, according to analysts.
Profit booking has been more evident in the broader, more-domestically focussed small- and mid-caps. They have dropped 1.85% and 1.9% in February so far, compared to the 0.5% decline in the Nifty 50.
(With inputs from agencies)
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