Extending the losses into the second consecutive session, the domestic market benchmarks the Sensex and the Nifty closed in the red on April 12 following weak global cues.
European stocks opened a percent lower while US equity futures indicated a weak open for Wall Street as investors remained nervous after seeing US 10-year Treasury yields rising above 2.80 percent, a level last seen in late 2018. Analysts say a sharp rise in bond yields hints that the US Fed may raise rates aggressively which may impede economic growth.
On the geopolitical front, the Ukraine war continues. As per a Reuters report, Ukraine's Deputy Defence Minister Hanna Malyar said the government was checking unverified information that Russia may have used chemical weapons while besieging Mariupol.
Crude oil benchmark traded above the $100 a barrel mark while the rupee fell 18 paise to close at 76.14 per dollar.
O the domestic front, investors awaited the March inflation prints to get a hint on the possibility of rate hikes. Analysts believe inflation may be on the higher side even for the coming few months in India.
Sensex opened 221 points lower at 58,743.50 and fell 666 points to touch the intraday low of 58,298.57. Eventually, the 30-share pack closed 388 points, or 0.66 percent, lower at 58,576.37 with 21 stocks in the red and 9 in the green.
Nifty50 closed 145 points, or 0.82 percent, lower at 17,530.30.
Axis Bank, Kotak Mahindra Bank, Power Grid and Maruti Suzuki ended as the top gainers in the Sensex index while Tata Steel, Tech Mahindra, Wipro, Bharti Airtel and Reliance Industries ended as the top laggards.
Mid and smallcaps underperformed the benchmarks as the BSE Midcap and Smallcap indices ended 1.45 percent and 1.47 percent lower, respectively.
"Hyperinflation and risk of a policy rate hike are placing the global market on its toes and are impacting the performance of equities with a rise in yield. Inflation in India is also expected to be on the higher side in Q1FY23, it is expected to subside due to a reversal of commodity prices and an improvement in supply. The domestic market is also cautious in anticipation of Q4 results," said Vinod Nair, Head of Research at Geojit Financial Services.
Even as the market ended in the red, nearly 180 stocks, including Tinplate Company Of India, Schaeffler India, Swan Energy, Adani Green Energy, Adani Transmission, Apollo Tricoat Tubes, Crisil, Mazagon Dock Shipbuilders, Page Industries, Raymond, Shree Renuka Sugars and HealthCare Global Enterprises, hit their 52-week highs in intraday trade on BSE.
The overall market capitalisation of BSE-listed firms dropped to ₹272 lakh crore from ₹274 lakh crore on Friday, April 8, making investors poorer by ₹2 lakh crore in two trading sessions.
"We witnessed a very volatile movement after a negative start in the market and an attempt to reverse from the previous support levels near 17,400-17,450. We expect the zone of 17,400-17,450 to act as a support zone from the short-term perspective. Technical indicator suggests, a volatile movement in the market. As such, we retain our cautious stance and advise the traders to refrain from building a fresh buying position, until we see further decisive movement in the market," said Vjay Dhanotiya, Lead of Technical Research, Capitalvia Global Research.
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