The key benchmark indices weakened in mid-noon deals mirroring the weak cues from the US and UK markets. At close, the Sensex was down 709.17 points or 1.26 per cent at 55,776.85, and ended its 5-day winning run. Meanwhile, Nifty was down 208.30 points or 1.23 per cent at 16,663. About 1296 shares have advanced, 2014 shares declined, and 95 shares are unchanged. India VIX surges over 6 per cent to 27.31.
Top Gainers & Losers
On the upside, Tata Consumer Products, M&M, Shree Cement, Cipla, UPL, Maruti Suzuki, and Britannia Industries were the top gainers, up in the range of 1-3.7 per cent. Broader indices, though in the red, outperformed the large-cap indices. The BSE MidCap and SmallCap indices closed 0.68 per cent and 0.88 per cent loser, respectively.
Shares of Ruchi Soya Industries surged 18 per cent to Rs 1,140 on the BSE in Tuesday’s intra-day trade, zooming as much as 42 per cent in the past two trading sessions after the company announced plans to launch Rs 4,300-crore follow-on public offering (FPO) next week.
Retail Inflation
February’s retail inflation print, which came in above the RBI’s comfort zone at 6.07 per cent, above a poll estimate of 5.93 per cent, also weighed on the investor sentiment. “With inflation above 6 per cent, the current account deficit at nearly 4 per cent of GDP, extreme fiscal stress and an uneven growth recovery, we project a sharp rise in macro vulnerabilities,” said Nomura India in a note.
Investors Eye Fed Outcome
Traders eye the US Federal Reserve’s two-day meeting to decide the rate policy. “The US Fed Chair Speech shall be of utmost importance as traders will be looking out for indications about the pace of future rate hikes. With inflationary pressures building in the US coupled with the Ukraine crisis that is fuelling a rally in commodities, traders are certain the Fed will kick off a tightening cycle and then raise rates at all six subsequent meetings this year,” Angel One Ltd. said in a note.
According to the CME’s Fedwatch tool, markets anticipate a 25 basis point rise at this meeting but pricing has risen to indicate a 70 per cent chance of a larger 50 basis point hike at its subsequent meeting in May, due to concerns about inflation, the brokerage firm further said.
Oil Tumbles to 2-Week Low
Oil prices extended losses on Tuesday, sliding to a two-week low as ceasefire talks between Russia and Ukraine eased fears of further supply disruptions and surging COVID-19 cases in China fuelled concerns about slower demand. Brent futures dropped $5.95 or 5.6 per cent to $100.95 a barrel by 0747 GMT after tumbling by more than $6 to $100.05 earlier in the session. U.S. West Texas Intermediate (WTI) crude fell below $100 level for the first time since March 1, dropping $5.49 or 5.3 per cent to $97.52 a barrel. It fell to as low as $96.70 earlier in the session. Both benchmarks declined by more than 5 per cent the previous day.
Resurgence of Covid
The resurgence of Covid cases in China is also likely to spook investors. In Asia, shares in Australia, South Korea, Hong Kong, and Shanghai were all down, while in Japan it closed on a flat note.
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