Indian shares turned negative by mid-day on Thursday, as the initial euphoria over an expected Federal Reserve rate hike waned and fears of surging inflation and an impending recession returned.
The NSE Nifty 50 index (.NSEI) reversed course and fell 1.1% to 15,521.9 by 0724 GMT, with metal stocks weighing on sentiment.
The BSE index (.BSESN) fell 0.9% to 52,053.21.
“The Fed event is over but weakness persists. The market is still in a downtrend,” said Mayuresh Joshi, head of equity research, at William O’Neil.
The U.S. central bank on Wednesday approved its biggest interest rate hike since 1994 and projected a slowing economy and rising unemployment in the months to come.
“It is difficult to predict in the short term, but bounces will keep coming. The trajectory is still downward,” Joshi added.
The 75-basis-point move was already factored in by the market after hot inflation data last week spooked investors, sending the NSE index down 3% so far this week.
Asian stocks stumbled on Thursday and the dollar regained its footing.
In India, metal and realty stocks fell, with the Nifty metal index (.NIFTYMET) down 3.3%.
Shares of budget carriers SpiceJet (SPJT.NS) and IndiGo owner InterGlobe Aviation (INGL.NS) fell 6% and 4%, respectively. SpiceJet’s managing director said the hike in aviation turbine fuel price was “not sustainable” and could lead to price hikes.
The Nifty PSE index (.NIFTYPSE) declined 2.2%, with Gas Authority of India (GAIL.NS) down 3.6%.
Only three stocks on the Nifty 50 traded higher, with Asian Paints (ASPN.NS) up 0.4%.
Analysts at J.P.Morgan upgraded Reliance Industries (RELI.NS) to “overweight” from “neutral”, but the company’s shares were largely flat after an initial 2.4% rise.
Source By: Reuters