Stocks end lower, rupee slips to record low on growth concerns
The rupee tumbled to a record low of 77.52 against the US dollar earlier in the session
BENGALURU: Shares fell and the rupee hit an all-time low on Monday, weighed down by global economic growth worries due to tightening of lockdown in Shanghai and fears inflation could increase aggressive policy tightening from central banks.
The NSE Nifty 50 index was down 0.67% at 16,301.85 at close, while the S&P BSE Sensex fell 0.67% to 54,470.67.
The rupee tumbled to a record low of 77.52 against the US dollar earlier in the session. It settled at 77.465.
“A hawkish stance by the Fed (U.S. Federal Reserve), rate hikes by the RBI (Reserve Bank of India) ... have created an atmosphere of risk-off for equities and we don’t know how long this will last,” said V.K. Vijayakumar, chief investment strategist, Geojit Financial Services
India’s benchmark indexes on Friday registered their worst week since November, dented by a surprise interest-rate hike by the RBI, foreign fund outflows, and mixed corporate results.
“Even after Nifty’s correction last week, it is trading at around 19 times FY23 earnings, which is higher than the long-term average and not a buyable valuation, particularly when global equity markets are facing headwinds like risk of slowdown in economic growth, Ukraine war and supply-chain disruptions caused by stringent lockdown in China,” Vijayakumar said.
Shanghai authorities were tightening the citywide covid-19 lockdown they imposed over a month ago, prolonging into lateMay.
In India, Nifty’s public-sector bank, metal, energy and fastmoving consumer goods sub-indexes were among the top losers, declining between 1% and 2.7%.
Reliance Industries reported a 22.5% rise in fourth-quarter profit. The conglomerate’s shares closed 3.9% lower in its sixth consecutive session of losses, amid a weak Mumbai market.
Meanwhile, state- owned insurer Life Insurance Corporation’s initial public offering, India’s biggest, was subscribed 2.85 times on the last day of bidding as of 1003 GMT.
In the international markets, France’s CAC 40 slipped 1.4% in early trading to 6,172.41.
Germany’s DAX fell 1.1% to 13,520.87. Britain’s FTSE 100 was down 1.1% at 7,306.34.
US shares were set to drift lower with Dow futures dipping 1.3% to 32,388.0. S and P 500 futures fell 1.5% to 4,058.75.
The Shanghai Composite was little changed, adding nearly 0.1% to 3,004.14. Markets were closed in Hong Kong for a national holiday.
Japan’s benchmark Nikkei 225 lost 2.5% to finish at 26,319.34. South Korea’s Kospi dipped 1.3% to 2,610.81.
Australia’s S and P/ASX 200 dropped 1.2% to 7,120.70. The benchmark in Jakarta, Indonesia, lost 4.4% as markets reopened after the Eid al-Fitr holiday last week.
The S and P 500 ended with a loss of 0.6%.
The Dow Jones Industrial Average fell 0.3%, while the Nasdaq slid 1.4%. The Russel 2000 slid 1.7% to 1,839.56.