Indian shares fall over 1%, rupee hits record low ahead of inflation data
BENGALURU, May 12 (Reuters) – Indian shares dropped over 1% on Thursday and the rupee hit an all-time low, ahead of domestic retail inflation numbers and amid a broader decline in equity markets following U.S. consumer price data.
Investor focus will be on the inflation data due at 1200 GMT. A Reuters poll showed India’s retail inflation likely surged to an 18-month high in April, driven by rising fuel and food prices, staying well above the Reserve Bank of India’s 2%-6% tolerance band for a fourth consecutive month.
The NSE Nifty 50 index was down 1.7% at 15,893 as of 0515 GMT, while the S&P BSE Sensex fell 1.55% to 53,251.08.
The Indian rupee plunged to a record low for a second time this week at 77.63 against the dollar amid a broader decline in Asian currencies.
“For Indian markets, inflation and Reserve Bank of India’s unexpected rate increase has created some kind of nervousness,” said Kranthi Bathini, director of equities strategy at WealthMills Securities.
Indian benchmark stock indexes have declined more than 6% this month, weighed down by the surprise interest rate hike by the Reserve Bank, foreign fund outflows and mixed corporate results.
India’s central bank is likely to raise its inflation projection for the current fiscal year at its June monetary policy meeting and will consider more interest rate hikes, Reuters reported on Wednesday.
A big question on investors’ mind is if we are seeing the beginning of an interest rate hike cycle, Bathini said.
Reliance Industries and Mahindra & Mahindra were among the top drags on the Nifty 50 index, falling 1% and 3% respectively.
Asian stocks fell on Thursday as data showed U.S. inflation was persistently high, and investors feared about the economic toll of aggressive interest rate hikes to tame it.
Disclaimer :- This story has not been edited by The Sen Times staff and is auto-generated from news agency feeds. Source: Reuters