Domestic equity indices extended their losses from the previous week and tumbled even sharply on Monday as high inflation in the US triggered possibilities of even more aggressive policy tightening by the Federal Reserve.
With Monday’s slump, the indices declined for six out of seven sessions.
At 9.42 a.m., Sensex was 2.7 per cent or 1,462 points down at 52,842 points, whereas Nifty 2.6 per cent or 419 points down at 15,782 points.
“The near-term market trend is weak. The May US inflation print at 8.6 per cent against the market expectation of 8.3 per cent is likely to turn the Fed more hawkish with a series of 50 bp rate hikes taking the terminal rate by mid 2023 above 3.5 per cent. Such a scenario would be negative for risky assets like equity, particularly in the context of declining global growth,” said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Most other Asian stocks also declined on Monday.
