Indian equity markets opened with deep cuts on Friday as traders awaited inflation numbers in the US, which were due later in the day. BSE data shows that investors in the market lost assets worth over Rs 2.7 lakh crore on Friday. Sensex is trading with a fall of about 950 points. nifty Around 16,200. Sensex was trading 952.7 points or 1.72 per cent lower at 54,4372.6 and Nifty was down 263.6 points or 1.6 per cent at 16,214.45.
Investor confidence has been shaken as continued higher levels of commodity prices, and disrupted supply chains around the world remain a double whammy for the economy and companies, analysts said. “The strengthening of US 10-year bond yield to 3.05 per cent could be interpreted as worse-than-expected inflation data in the US on Friday in the market. If the inflation data turns out to be worse than expected, the equity markets will be in a bearish state. If it doesn’t, the market will rally next week. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “A decline in high-quality banking and IT stocks may give good returns to investors in the medium term.”
Here are the key factors that dragged the market down on Friday:
US CPI Data
Investors await US CPI inflation data for May today. They expect the US Federal Reserve to raise rates by 50 basis points next week, especially if the data confirms higher readings of inflation.
Deepak Jasani, head of retail research, HDFC Securities, said investors were nervous about a possible slowdown in economic growth in the wake of the Federal Reserve’s tightening of monetary policy.
crude oil at a boil
Reaching new peaks in crude oil prices is hurting India’s import bill, which mainly includes petroleum products. Crude oil prices remained close to a three-month high despite a fall on Friday. Brent crude futures for August were down $1.01, or 0.8 per cent, at $122.06 a barrel as of 0141 GMT, after falling 0.4 per cent the previous day.
ECB signal rate increase
The European Central Bank (ECB) announced on Thursday that it will hike rates by 25 bps at its next meeting in July. This will be the first increase in interest rates in nearly 10 years. Besides, the bank expects further hike in the September meeting as well. It lowered the growth forecast for 2022 to 2.8 percent, and raised the inflation forecast to 6.8 percent from 5.1 percent projected in March.
Shanghai returns to partial COVID-19 restrictions
China’s business hub Shanghai has been placed under restrictions again after a city-wide lockdown was lifted on June 1. The re-imposition of the lockdown in the major Chinese city is hitting markets, as there is a risk of supply disruptions. India Profitability Prospects of Inc.
Rupee at all-time low
The domestic currency touched a low of Rs 77.82 per US dollar on Friday. The greenback has been on the front foot due to weakness in emerging market currencies. The dollar was supported by a jump in US Treasury bond yields. However, ICICIDirect in its morning note limited the sharp jump on weak economic data. Dollar index extended its gains and crossed the 103 mark.
read all breaking news , today’s fresh news And IPL 2022 Live Updates Here.