Fed rate statement, FPI outflows weigh- Stocks tumble on global sell-off, RIL tanks 2

Fed rate statement, FPI outflows weigh: Stocks tumble on global sell-off, RIL tanks 2.3%

The equity markets tumbled for the second consecutive session on Monday after a broad-based sell-off in the Asian markets, amid fears of tighter restrictions and a wider lockdown in Beijing. Hawkish comments from the US Federal Reserve to raise interest rates by as much as 50 basis points (bps) in May and unbated selling from overseas investors continued to weigh on the markets.

The market’s fear gauge – India VIX – surged more than 15% to close at 21.26 on Monday, after being in a range of 18-19 for the last three weeks. In the last two trading sessions, investors have lost Rs 6.5 trillion in wealth, as the market capitalisation of all BSE-listed companies fell to Rs 265.30 trillion on Monday from Rs 271.77 trillion on Friday. Benchmarks close in the red in seven of the last nine sessions with each of them coming off about 5% during the period.

“Markets in India took cues from its Asian peers as Chinese markets posted losses amid possibilities of more Covid-related restrictions in the country. Further, movement in the US markets post Powell’s hawkish comment to raise interest rates by 50 bps also impacted the sentiment in other markets. The dollar index above 100 and the need to trim exposure in EMs has triggered the intensified selling via overseas investors,” Aishvarya Dadheech, fund manager, Ambit Asset Management, told FE.All major markets in Asia ended in the red on Monday. China’s Shanghai Composite was the worst performer, falling 5.1%, while Hang Seng ended lower by 3.7%. Japan’s Nikkei 225 ended lower by 1.9%.

Deepak Jasani, head of retail research, HDFC Securities, said: “Asian stocks had their worst session in a month-and-a-half on Monday as fears grew that Beijing was on the verge of joining Shanghai in lockdowns.”Back home, all sectoral indices, barring banks, ended in the red. Nifty realty, metal, oil & gas and IT were the worst performers. With a decline of 2.1% on Monday, Nifty IT slipped to its lowest levels since August 2021. So far in April, the IT index has declined more than 12% as investors lightened their positions ahead of Q4 results. In the overall market breadth, out of the 3,674 stocks traded on the BSE, 2,558 declined.