Stocks resume downward spiral after two-day pause

BENGALURU: Indian shares closed more than 1% lower on Wednesday, with bond yields at their weakest in over three weeks, as global stocks and oil prices declined amid mounting recession fears.

The NSE Nifty 50 index closed 1.44% lower at 15,413.3 while the S&P BSE Sensex dropped 1.35% to 52,51,822.53. Both the indexes had clocked their best session in three weeks on Tuesday.

India’s benchmark 10-year bond yield fell 10 basis points on the day to 7.38%, its lowest level since May 30 before edging slightly higher to 7.40% by 0916 GMT.

India’s partially convertible rupee was trading weaker to the dollar, while traders closely monitor the minutes of the monetary policy committee’s June policy for near-term direction.

Metal stocks declined after their short rebound on Tuesday, as a stronger US dollar and weak sentiment sent London copper prices to their lowest level since March 2021.

The Nifty Metal index tumbled 4.8%, with Hindustan Copper falling 7.3%.

The Nifty energy index lost 2.3%, while the Nifty Media index dropped 3.5%.

Among gainers, Jain Irrigation Systems closed more than 10% higher after the company said on Tuesday it would sell a 78% stake in its international irrigation business to Temasekowned micro-irrigation company Rivulis.

Analysts at BofA Global Research on Wednesday cut their year-end target for the Nifty 50 to 14,500 from 16,000, and added they remain cautious with headwinds seen in the near term.

World stocks fell as the Japanese yen hit a fresh 24-year low against the dollar, while Brent crude futures were down 4.1% at $110 a barrel amid a push by US President Joe Biden to reduce taxes on fuel to cut costs for drivers.

The rupee declined by 19 paise to a record low of 78.32 (provisional) against the US dollar on Wednesday.

Continuing their selling spree, foreign institutional investors (FIIs) offloaded shares worth a net ₹2,701.21 crore on Tuesday, as per exchange data.