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Inflation fears hammer Indian shares

BENGALURU, June 13 (Reuters) – Indian shares fell 2.5% on Monday and the rupee hit a record low, as U.S. inflation data and a COVID-19 warning from Beijing roiled global markets, with traders in Asia’s third-largest economy waiting for May consumer price data for further cues.

The NSE Nifty 50 index was down 2.5% at 15,785.05, as of 0509 GMT, with all constituents trading lower. Earlier in the session, it fell as much as 2.8% to a four-week low. The S&P BSE Sensex sagged 2.6% to 52,874.03.

“Inflationary pressures are real and recent earnings by U.S. companies have shown that it has become difficult to pass on that high inflationary pressure,” said Saurabh Jain, assistant vice president, SMC Global Securities. “Investors fear that we are heading to a recession.”

The rupee touched a life-time low of 78.28 to the dollar while the benchmark 10-year bond yield hit 7.60%, its highest since Feb. 28, 2019.

All eyes are now on India’s retail inflation data due later in the day. A Reuters poll found that the consumer price index slipped modestly in May, but stayed well above the Reserve Bank of India’s upper tolerance limit for a fifth consecutive month. read more

Asian stocks dropped over fears that the U.S. Federal Reserve would tighten its policy more aggressively after data released last week showed the consumer price index hit its highest in over 40 years last month.

Adding to investors’ concerns, Beijing’s most populous district of Chaoyang announced on Sunday three rounds of mass testing to quell a “ferocious” COVID-19 outbreak.

IT stocks dragged the Nifty 50 lower, with Infosys Ltd and Tata Consultancy Services shedding 3.3% each. The Nifty IT index dropped 3.4%.

Bajaj Finserv and IndusInd Bank were the top losers on the NSE, declining about 5% each. The NSE bank index sank 3.5%.


Disclaimer :- This story has not been edited by The Sen Times staff and is auto-generated from news agency feeds.
Source: Reuters


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