Mr. Vishal Wagh, Research Head, BONANZA PORTFOLIO LTD
Indian Indices open on a negative note tracking global market, Sensex crashes 1,000 pts at open, Nifty below 17,800; all sectors in the red. At the time of closing, Sensex ended the day 224 points or 0.37% lower at 60,346 while Nifty shed 66 points or 0.37%, closing at 18,003. During the day, benchmark indices recover from day's low. State Bank of India joins Rs 5-trillion market cap club.
U.S. inflation soars; the Consumer Price Index gained 0.1% last month versus expectations for a 0.1% decline after being unchanged in July. Food prices rose 0.8%, with the cost of food consumed at home increasing 0.7%. Food prices surged 11.4% over the last year, the largest 12-month increase since May 1979. The US Treasury rocketed higher after a hot inflation reading. The 2-year Treasury yield surged above 3.79%, the highest since 2007. The yield on the benchmark 10-year Treasury note surged 6bps, trading at 3.42%. UK August CPI inflation was at 9.9% YoY versus the estimate of 10%. Core CPI inflation was at 6.3% YoY versus the estimate of 6.2%. Bank of Japan conducts rate checks in apparent preparation for currency intervention. OPEC has stuck to its forecasts for robust global oil demand growth in 2022 and 2023. Demand growth is seen at 3.1 mn bpd in 2022, 2.7 mn BPD in 2023.
Wall Street posted its biggest loss in two years, Dow Jones Industrial Average fell, 3.94%, S&P 500 lost 4.32% and Nasdaq Composite dropped 5.16%. Asian shares also tumbled. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.3% in early Asia trade. Japan's Nikkei tumbled 2.7%.
On the sectoral front, financials and metals added over a percent each while the IT index shed over 3%. BSE midcap rose for the 8th straight session while small-cap rose for the 11th consecutive session.
Nifty 50 top gainers are Indusind bank, NTPC, SBIN, Power Grid and Kotak Bank while Infy, TCS, TechM, HCLTech and L&T were among the top losers.