Sensex, Nifty50 edge lower as hotter-than-expected US inflation hurts global markets

Indian equity benchmarks Sensex and Nifty50 declined on Wednesday,mirroring weakness across major global markets after a worse-than-expected US inflation reading that fuelled concerns about a prolonged period of aggressive hikes in benchmark interest rates.

Both headline indices dropped 0.4 per cent in early deals. The Sensex lost 232.7 points to hit 60,796.5 at the weakest level of the day so far, and the Nifty50 slipped to as low as 17,865.4, down 64.5 points from its previous close. 

Editor's take

Zee Business Managing Editor Anil Singhvi expects support for the Nifty50 benchmark to come in at 17,800-17,875 levels and a strong buy zone in the 17,725-17,775 band on Wednesday.

For the Nifty Bank, he sees support at 41,375-41,550 levels and a strong buy zone in the 41,100-41,250 area. 

Read more on how Anil Singhvi views the market today and what he recommends

Britannia, Larsen & Toubro, Hindustan Unilever, ONGC, Sun Pharma, SBI Life and HDFC, trading aroudn one per cent lower each, were the worst hit among the 26 laggards in the Nifty50 basket. 

Eicher Motors, Apollo Hospitals, Reliance, Adani Enterprises, Maruti Suzuki, Bharti Airtel and Tata Steel, rising around 1-3 per cent, were the top gainers among blue-chip stocks.

Among heavyweights, ITC, the HDFC twins, Larsen & Toubro and Infosys were the biggest drags on headline indices, whereas the maximum support came from Reliance, Bharti Airtel and Maruti Suzuki.

Overall market breadth was skewed in favour of the bulls, with an advance-decline ratio of 8:7 as 1,668 stocks rose and 1,432 fell on BSE. 

"The key takeaway from US inflation data is that while the disinflationary process is on track, it is very slow. This means the Fed might hike rates again and the rates might remain higher for a longer period of time," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

ITC shares dropped as much as two per cent as the cigarettes-to-hotels conglomerate traded ex-dividend on Dalal Street.  

Global markets

Equities in major Asian markets were in the red, tracking a fall in S&P 500 and Dow Jones overnight on Wall Street following the release of US inflation data. MSCI's broadest index of Asia Pacific shares outside Japan was down 1.5 per cent at the last count. Japan's Nikkei 225 was down 0.4 per cent, China's Shanghai Composite 0.4 per cent and Hong Kong's Hang Seng 1.6 per cent. 

S&P 500 futures were down 0.4 per cent, suggesting a weak start ahead on Wall Street.