Sensex falls 300 points as global markets slump on rate cut worries; Nifty below 22,400

All three major stock indices dropped about 1% overnight, while 10-year treasury yields hit a four-month high after data signalling steady labour demand added to concerns of a potential delay in the Fed's rate cut.

In early trading, key contributors to the Sensex decline included , , , and .

On the other hand, was the top Sensex gainer, rising 2.3% after the company commissioned two new units in Chhattisgarh and Tamil Nadu to surpass 150 MTPA capacity.

Anupam Rasayan rose nearly 7% after the company signed a letter of intent worth about $90 million with a Japanese multinational company to supply two advanced intermediates using fluorination chemistry.

On the sectoral front, Nifty Realty fell 1.2%, dragged by Lodha, , and . Nifty Bank, FMCG, Pharma, Healthcare, and Consumer Durables also opened in the red. In the broader market, Nifty Midcap100 fell 0.2%, while Smallcap100 rose 0.3%.

Experts View
"The rising bond yields in the US (the 10-year is at 4.36%) is impacting equity markets. The rate cut from the Fed expected in July is fading now since the labour market continues to be tight and the rising crude (Brent at $89) is feared to add to inflation further constraining the ability of the Fed to cut," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"Even though the Fed chief has been sounding dovish recently, the market is now less optimistic about 3 rate cuts in 2024. This will continue to be a drag on equity markets globally. In India FPIs may continue to sell," Vijayakumar added.

Deven Mehata, Research Analyst at Choice Broking, said, "Nifty can find support at 22,350 followed by 22,300 and 22,250. On the higher side, 22,500 can be an immediate resistance, followed by 22,550 and 22,600."

Global Market
Asian shares tracked Wall Street lower on Wednesday as U.S. yields held near four-month highs, while a powerful earthquake in the region raised concerns about possible disruptions to the vital chip-making industry.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%. Japan's Nikkei dropped 1%, after a 20% blockbuster rally in the first quarter.

The three major Wall Street indices fell about 0.7%-1%. Tesla shares lost about 5% after quarterly deliveries fell for the first time in nearly four years.

FII/DII Tracker
Foreign portfolio investors sold Rs 1,623 crore of shares on a net basis, while domestic institutional investors purchased shares worth Rs 1,953 crore on Tuesday, according to provisional data from the National Stock Exchange.

Crude Oil
Oil prices extended gains on Wednesday as a larger-than-expected fall in U.S. crude inventories and escalating geopolitical tensions raised investor worries about tighter supplies.

Brent futures for June delivery rose 11 cents, or 0.12%, to $89.03 per barrel, while U.S. West Texas Intermediate (WTI) crude futures for May climbed 3 cents, or about 0.04%, to $85.18 a barrel, at 9:40 am IST.

Currency Watch
The Indian rupee rose 6 paise to 83.36 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.09% to 104.72 level.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)