Sensex crashed over 1,000 points in afternoon trade today after a brief bout of relief rally in the morning session. The 30-stock index hit an intraday low of 51,482, down 1,059 points against the previous close of 52, 541.
Accounting for the intraday low, Sensex has crashed 1,705 points from the high point of the day today. The index had surged to 53,142 in the morning trade.
Similarly, Nifty tanked 348 points intraday to 15,344 (52-week low) against the previous close of 15,692. The index fell 519 points from the high point of the day.
Earlier, Nifty had surged to 15,863. The crash in the benchmark indices comes after a rally in the morning session following a surge in global peers. However, in the afternoon session, global markets turned negative with European indices slipping nearly 2 per cent each.
While FTSE slipped 145 points or 2 per cent, DAX tanked 2.75 per cent or 372 points. CAC 40 too lost 132 points or 2.18 per cent to 5,898.
Experts said the volatility has returned in the global markets and the event of recent rally due to Fed rate hike is over.
Mohit Ralhan, Managing Partner at TIW Capital Group
“The central banks across the globe are playing catch up with inflation and making efforts to race ahead of the curve. The 75-basis point increase by the Fed and more importantly the upward revision of 1.5 per cent in the expected year-end rate indicates that the inflation is winning the battle as of now. Fed also significantly cut its outlook for 2022 economic growth to 1.7 per cent down from 2.8 per cent in March. The risk of a recession in the USA has increased and the next two quarters will be extremely crucial. Although Fed expects the inflation to move lower in 2023, the effect of the Fed’s actions on the broader economy remains uncertain. The markets are expected to remain quite volatile as it tries to find the balance between economic growth and high inflation.”
Share Market Live: Sensex tanks 1,000 pts, Nifty below 15,400; Tata Steel, TechM top losers
Yash Gupta, Equity Research Analyst, Angel One
“Nifty50 has corrected more than 17 per cent from its recent highs of 18,604. We have seen a broader market correction in the last 3 months on the back of domestic as well as global issues. In global markets, there are concerns regarding the inflation in USA, Russia-Ukraine war, crude prices and so on. We have seen corrections of more than 32 per cent in NASDAQ 100 and 20 per cent in S&P 500.
Indian markets continue to see selling pressure from the FIIs as rate hikes in the USA market makes emerging markets less attractive for the foreign investors, along with this domestic issue like higher inflation, increase in the crude oil prices, and rate hike by RBI.
Currently, Nifty is trading at a price to earnings of 19.1x which is in the lower range of the last 5 years’ average and the dividend yield is also attractive at 1.5 per cent. Along with this, the Nifty midcap 100 is trading at a price to earnings of 20.8x which is in the lower range of the last 5 years.
We believe that the market is in a consolidation zone now due to global as well as domestic issues but all the near negatives have been priced in the market at this point in time, valuations are attractive for the long-term investors.”
AR Ramachandran, Co-founder & Trainer, Tips2Trades
“Weaker global cues following the steepest interest rate hike by the Federal Reserve have caused jitters in all global equity markets. Technically, if Nifty closes below 15,660, in the coming days we could witness 15,240 and 14,890 as well.”