Dalal Street stocks on Wednesday mirrored Wall Street losses, as Fed Chair Jerome Powell told the US Congress a faster money tightening is warranted and that inflation in US may peak higher than what was earlier anticipated earlier. The hawkish commentary pushed the dollar up to a fresh three-month high, killing risk appetite in Asia.
At 9.17 am, the BSE Sensex was trading at 59,890.09, down 334.37 points, or 0.56 per cent. The NSE barometer fell 92.45 points, or 0.52 per cent, to 17,619. Dow Jones futures were flattish after an overnight fall in US stocks.
“The Fed Chair Powell killed risk appetite with a hawkish first day on Capitol Hill. Powell said that the Fed will likely need to raise interest rates more than expected due to the recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests more needs to be done to bring down inflation,” said Edward Moya, Senior Market Analyst, The Americas OANDA.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.55 per cent. Hong Kong’s Hang Seng tumbled 2.6 per cent; China’s Shanghai Composite was down 0.56 per cent; Korea’s Kospi tanked 1.16 per cent; Taiwan’s key index was down 0.4 per cent. Japan’s Nikkei edged 0.20 per cent higher.
Moya said the Fed ChairPowell is not taking any chances and wants to send home a clear message that the Fed will do whatever it takes to bring down inflation,” Moya said.
A total of 25 of 30 Sensex stocks were trading lower. Tech Mahindra declined 1.51 per cent to Rs 1,074.10 and was the worst index performer. Peer IT stocks Infosys and HCL Technologies fell 1.44 per cent and 1.32 per cent, respectively.
Jewellery maker Titan Company, private lenders IndusInd Bank and Kotak Mahindra Bank, NBFC Bajaj Finserv and IT major Wipro slipped over 1 per cent each. Domestic stocks were closed on Tuesday on account of Holi.
Shares of Adani Enterprises Ltd edged 0.62 per cent higher at Rs 1,995.15. Other Adani group stocks such as Adani Green Energy, Adani Transmission, Adani Power and Adani Total Gas gained 4-5 per cent after the Adani group said it has repaid share-based financing of Rs 7,374 crore and would prepay all such remaining loans by the end of the month.
ZEE Entertainment Ltd rose 1.54 per cent to Rs 198.35.The stock rose as ZEE Media and Indian Performing Right Society Limited mutually entered into the settlement agreement on such agreed terms by which all disputes and claims have been settled between the company and IPRS and accordingly IPRS has agreed to withdraw the aforesaid insolvency petition filed by them.
As far as traders are concerned, Sameet Chavan of Angel One said declines would provide excellent opportunities to create fresh longs, he sees Nifty to surpass 17,800 sooner or later and head towards the psychological mark of 18,000. He sees 17,600–17,500 as immediate support levels.
The US Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation, the US Federal Reserve Chairman Jerome Powell told US lawmakers on Tuesday.
The remarks were his first since inflation unexpectedly jumped in January and the US government reported an unusually large increase in payroll jobs for the month.
Following the development, dollar index, which measures dollar movement against a basket of six major world currencies, rose 0.04 per cent to 105.653 level.
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