Indian stocks started in May in a brutal manner, with losses seen worldwide following a sharp sell-off on Wall Street on Friday, as investors expect the expected rise in the Federal Reserve this week.
The NSE Nifty 50 index fell 0.65% to 16,991.05, from 0455 GMT on Monday, with its major indicators below the negative, while the S&P BSE Sensex fell 0.65% to 56,687.60. Benchmark indexes posted losses on Friday for the third week in a row. Nifty’s IT, auto and metal indicators were among the least successful, falling between 0.7% and about 2%.
“The sharp rise in U.S. markets on Friday is an indication of market shock and panic caused by the rise of the Fed, rising dollar index and the long war in Ukraine,” said V K Vijayakumar, chief investment strategist at Geojit Financial. Services, adding that market volatility is likely to continue for some time. Many Asian markets are closed for the holidays, and Indian markets are closing on Tuesday.
The focus of investors is back on the Federal Reserve, which is expected to raise interest rates by 50 points when the US central bank meeting ends on Wednesday.
Market participants will look for signals about future interest rates, the Fed plans to reduce its balance sheet and its outlook for when inflation pressures will fall. Nifty 50 shares Britannia Industries lost 1.4%, while HDFC Ltd increased 1% ahead of its quarterly profits review which should be reviewed later in the day.
IT service provider Wipro dropped by 2.7% and among the biggest losers in the Nifty 50. The company announced last week that pressure on margins would continue within the next two to three quarters. Mahindra & Mahindra, the only major retailer in the Nifty auto sub-index, increased 0.16% after a carmaker said home purchases in April increased by 23% year-on-year.
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