Indian stock markets and the rupee fell sharply tracking weak global cues. The Sensex fell nearly 1,000 points while Nifty was below ₹16,500. Indian rupee today slumped against the US dollar amid a stronger greenback. The Indian currency fell to 76.64 against the rupee as compared to previous close of 76.26. The US dollar and Treasury yields rallied with investors awaiting U.S. jobs data due later in the day.
Global markets have been battered this year by a series of crises including surging inflation, rising interest rates, China’s economic slowdown and the war in Ukraine. Asian equities tumbled today following a rout on Wall Street fuelled by worries over rising interest rates and surging inflation.
“The single important factor roiling global equity markets is the reemergence of inflation as a major threat and market’s scepticism over the central banks’ ability to contain inflation without triggering a sharp economic slowdown. Nasdaq is at one-year lows and S&P 500 appears to be moving in that direction. India cannot remain uncoupled from this trend particularly when FPIs are on a selling spree and has more fire power to remain bearish,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“Investors should remain calm in these turbulent times without taking aggressive positions. Calibrated buying on declines in small quantities in high quality stocks with preference for value over growth would be a good investment strategy.”
Crude rose after key oil producers led by Saudi Arabia and Russia refused to lift output more than their planned marginal increase as they weighed tight supply concerns caused by the Ukraine war.
“US markets witnessed a relief rally on Wednesday after FOMC meeting but it tumbled on Thursday due to more anxiety over rising interest rates. Pound also fell on fears of UK recession,” said Rohit Nigam, Head – PMS, Hem Securities.
Analysts say US non farm payrolls data and unemployment rate will be announced today which may decide the direction of global markets.
Reliance Industries will also announce earnings later in the day.
“With most of the negative factors in play, FII selling has once picked up, as overseas investors sold shares worth ₹2,074.74 crores on Thursday. For Nifty, the interweek support is seen only at 15901 mark. Waterfall of selling is likely towards 15200-15250 mark if the index closes below 15901 mark,” said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.
Analysts see further weakness in the rupee. “FIIs are busy liquidating India’s stocks and bonds. Oil prices are back in action above $110 as Europe is preparing for an oil embargo on Russia. Prices could further jump once Chinese improvement in Chinese demand post easing of lockdown. Fundamentally, the domestic trade deficit widened again above $20 billion and inflation is likely to jump around 8% in April. Summing up in short, once FDI flows evaporate from the market and RBI allows a depreciating move, we could see the USDINR pair heading higher towards 77 and 77.50 levels over the short term. On the flip side, yesterday’s low of 76 will be an immediate support level,” CR Forex Advisors said in a note.