Sensex Opens In The Red As Global Financial Conditions Tighten

0 0
0 0
Sensex Opens In The Red As Global Financial Conditions Tighten
Read Time:3 Minute, 21 Second


Stock Market India: Benchmarks slipped on Monday to reverse previous session’s rally

Indian equity benchmarks reversed a sharp rally in the previous session and started cautiously on Monday, tracking a fall in Asian shares following another setback on Wall Street as investors brace for a more aggressive tightening in financial conditions worldwide, with all the risks of recession it entails.

The latest meeting minutes showed Reserve Bank of India’s Monetary Policy Committee (MPC) might rely more on statistics when determining the country’s key interest rate as inflation is predicted to begin to ease.

That dovish tone by the RBI did not help Indian stocks.

The 30-share Sensex index fell 137.84 points to 57,782.13 in early trade. Similarly, the NSE Nifty-50 index declined 52.75 points to 17,132.95.

The top laggards among the Nifty components were Mahindra & Mahindra, Adani Enterprises, JSW Steel, and Larsen & Toubro.

On the other hand, early trade saw winners include Bajaj Auto, State Bank of India, ICICI Bank, and Eicher Motors.

“Volatility is likely to be the hallmark as Nifty bulls brace for rough sessions in the near term as things do not look pretty good right now at Dalal Street,” Prashanth Tapse – Research Analyst, Senior Vice President for Research at Mehta Equities, told PTI.

Both benchmarks reflected a sea of red in Asian bourses. Hong Kong, Australia, and Japan saw stock drops, with technology companies leading the way.

The S&P 500 and Nasdaq 100 contracts rose after falling on Friday when Treasury rates soared as inflation estimates for the coming year rose.

Global stocks have been impacted by worries about the world economy and a rise in demand for safe-haven assets as the Federal Reserve swiftly raised interest rates this year to rein in soaring inflation, which enticed capital back to the United States and drove up the value of the dollar.

While the S&P is an eye-watering 25 per cent off its peak, BofA Economist Jared Woodard warned the slide was not over given the world was transitioning from two decades of 2 per cent inflation to a time of something more like 5 per cent inflation, reported Reuters.

“$70 trillion of ‘new’ tech, growth, and government bond assets priced for a 2 per cent world are vulnerable to these secular shifts as ‘old’ industries like energy and materials surge, reversing decades of under-investment,” Mr Woodard wrote in a note.

“Rotating out of 60/40 proxies and buying what is scarce – power, food, energy – is the best way for investors to diversify,” he added.

As everyone turns their attention to UK bonds now that the Bank of England’s (BoE) emergency purchasing spree is done, worries about financial stability are added to the toxic mixture.

“The BoE was doing emergency bond-buying that’s technically identical to QE with one hand while furiously raising the policy rate with the other,” Analysts at ANZ said in a note.

“Monday’s market action will provide a test for the survival of Truss’ low-tax vision and her political future.”As everyone turns their attention to UK bonds now that the Bank of England’s (BoE) emergency purchasing spree is done, worries about financial stability are added to the toxic mixture.

Investors must deal with news from Beijing, where President Xi Jinping stated that China’s global power had strengthened while issuing a warning of “dangerous storms” to come.

There were few indications that the Covid-Zero campaign or the housing market regulations straining the economy would ease up. Mr Xi also asserted that despite escalating hostilities with the US, China would triumph in its struggle to develop crucial technology.

On other market news, oil recovered some of its losses after a weekly decline as concerns about an economic downturn continues to cloud the demand outlook.

After a choppy week in which the dollar appreciated due to speculation about a more aggressive Fed rate hike, gold prices stabilised in Asia.



Source link

About Post Author

Newslaava

“I am an architect, animator and teacher working in architecture and design at __india__. This site is a great resource for anyone looking to get more updates from their home. Fill your home (heart) with more trending accessories from choosing the best colors for your mind room. NewsSalava.com will rob your heart .... Cool
Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Comment

LUKA DEFEATS STEPH AND MAVS EDGE WARRIORS IN THRIFT TEAM USA PLAYERS EMBRACE SAEID EZATOLAHI OF IRAN ON AN EMOTIONAL LEVEL Week 12 Bengals vs. Titans final score predictions Allen Robinson, wide receiver for Rams, foot injury? The Buccaneers offence is not strong, no. But is it sufficient? engaland world cup: An employee of the US Embassy in London was fired