Stock Market on Monday: The markets opened on a negative note on Monday due to somber mood overseas after US inflation jumped to a new 40-year high of 8.6 per cent in May. With the sharp rise in US inflation that beat street expectations, all eyes will be on the US Federal Open Market Committee (FOMC) meeting scheduled on Wednesday, June 15, as investors fear aggressive rate hikes on the anvil. That apart, India will release retail inflation figures for May on Monday, June 13.
Carnage At D-Street on A Monday Morning
At 10:19 am, the S&P BSE Sensex slumped over 1,700 points as it slipped below the 53,000 level and the Nifty50 shed 500 points to move below 15,700, the first time since March 8.
Top Losers & Gainer on Nifty
Cipla, Sun Pharma, SBI Life Insurance and Power Grid Corporation were among major gainers on the Nifty, while losers were Kotak Mahindra Bank, HDFC, L&T, Hindalco Industries and Infosys.
RBL Bank is Down 15%; Hits 52-Week Low
RBL Bank stocks slid 15 per cent in early trade after the private bank announced the appointment of veteran banker R Subramaniakumar as its new managing director and chief executive officer. The appointment comes after the former MD and CEO of RBL Bank unexpectedly stepped down, after which RBI appointed a nominee director on the board of the bank. Most analysts downgraded the stock, noting that the appointment raises more questions than answers, as the veteran banker was previously involved in turning around weak asset quality.
LIC Shares Hit A Fresh Low
Shares of Life Insurance Corporation of India (LIC) hit fresh record low of Rs 682 on the BSE in opening deals as the 30-day lock-in period for anchor investors end today. Anchor investors, who bought over 59 million shares, can sell their shares in the open market from Monday.
10-Year Bond Yield Rises To 3-Year High
The yield on the 10-year bond rises 8bps to 7.59 per cent, at the open. The rise in yield comes amid crude prices in the vicinity of $120 per barrel and inflationary concerns.
Rupee Breaches 78 per US Dollar for First Time
Indian rupee plunged to an all-time low on Monday. The Indian currency began the day 30 paise lower at 78.14 per US dollar on Monday against the close of 77.84 on Friday.
Why Are The Markets Falling Today?
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services, said: “Investors would look forward to upcoming Fed meeting scheduled on June 14 and 15. On the domestic side, a depreciating rupee, high crude oil prices and consistent FII selling remain key negatives. The market is stuck in a broader range for the last one month, which is expected to continue until any clear direction emerges on either side. While declines are being bought into, support is missing at higher levels. We expect limited stock and sector-specific action. Energy, auto, auto ancillary, select banks, retail, QSR and defence sectors are likely to be in focus.
IIP Data- A Silver Lining?
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “One silver lining is the 7.1 per cent increase in IIP which indicates that the Indian economy is doing well. Therefore, long-term investors can use the dips in the market to buy high-quality economy-facing stocks like capital goods, banking, telecom and export segments.”
US Markets See Biggest Weekly Decline On Inflation Data
US stocks posted their biggest weekly percentage declines since January and ended sharply lower on Friday as a steeper-than-expected rise in US consumer prices in May fueled fears of more aggressive interest rate hikes by the Federal Reserve. The Dow Jones Industrial Average fell 880 points, or 2.73 per cent, to 31,392.79; the S&P 500 lost 116.96 points, or 2.91 per cent, to 3,900.86; and the Nasdaq Composite dropped 414.20 points, or 3.52 per cent, to 11,340.02.
Asian Stocks Sink As Inflation Worries Escalate
Tokyo shares opened down Monday, as global inflation worries escalated on fresh US data and drove down Wall Street, especially high-tech issues. The benchmark Nikkei 225 index fell 2.63 per cent, or 731.04 points, to 27,093.25 in morning trade, while the broader Topix index lost 2.05 per cent, or 39.86 points, to 1,903.23.
Asian stocks sank on Monday and bond yields ticked higher, as red-hot U.S. inflation reignited worries about even more aggressive Federal Reserve policy tightening, and a COVID-19 warning from Beijing added to concerns about global growth. Chinese blue chips dropped 0.84 per cent, and Hong Kong’s Hang Seng suffered a 2.9 per cent slide. Japan’s Nikkei slumped 2.78 per cent, and South Korea’s Kospi declined 2.78 per cent.
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