Sensex, Nifty Suffer Big Losses For Second Day After Budget 2018: 10 Updates

Sensex and Nifty fell sharply today, extending Friday’s losses, amid a selloff in global markets. Asian markets were sharply lower amid speculation that global central banks might be forced to tighten policy more aggressively. At day’s low, the Sensex fell nearly 550 points to 34,520 while the Nifty slumped below 10,600. The Sensex and Nifty had slumped more than 2 per cent on Friday, posting their biggest fall in nearly 15 months, as the long-term capital gains tax on equity investments, announced in Budget 2018, dampened sentiment. Markets recovered a bit in late morning trade, with Sensex down 272 points at 34,793 while Nifty was trading at 10,668, down 92 points.
 
10 Updates On Sensex, Nifty Selloff Today:
  1. The latest selloff in global markets was triggered by Friday’s US jobs data which showed wages growing at their fastest pace in more than eight-and-a-half years and fuelling inflation expectations.
  2. This has led to expectations that the Federal Reserve – the US central bank – could raise interest rate faster than expected.
  3. US bond yields or interest rate have also risen sharply in anticipation of tighter Fed policy, which is seen negative for emerging markets like India and commodity prices.
  4. On Friday, the Dow fell 2.54 per cent, the S&P 500 2.12 per cent and the Nasdaq 1.96 per cent. It was the Dow’s biggest daily percentage loss in 20 months and the largest point fall since December 2008.
  5. Back in the domestic markets, the market selloff was broad-based today with all BSE sectoral indices, barring index for IT stocks, coming under strong selling pressure.
  6. Banking capital goods and metal stocks were under strong pressure. Hindalco, Yes Bank, UPL, Vedanta and Bajaj Finance were down between 3 per cent and 4 per cent.
  7. Asian markets on Monday fell the most in over a year with MSCI’s broadest index of Asia-Pacific shares outside Japan shed 1.9 per cent in the largest daily drop since late 2016. Japan’s Nikkei sank 2.3 per cent, while Australia’s main index lost 1.3 per cent and Chinese blue chips slid 0.7 per cent.
  8. The next trigger for markets is the RBI’s policy review on February 7 amid worries it could turn more hawkish on inflation after inflation hit a 17-month high in December, well above its 4 per cent target.
  9. “We expect the RBI to remain on a pause in this policy. However, the tone will likely be more hawkish with probability of rate hikes in FY2019 increasing,” said Suvodeep Rakshit, senior economist at Kotak Institutional Equities.
  10. Sameet Chavan of Angel Broking says the market trend remains weak and traders should remain light and avoid taking any undue risks.
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