Sensex, Nifty plunged almost 1% as global headwinds upset market sentiments

Domestic indices opened on a lackluster note on Wednesday amid weakness in the global market. India’s outperformance of its stock market compared to its peers could be attributed to the resilience of its economy; however, the global cues continue to spew nervousness in the domestic stock market.

The BSE Sensex opened flat on Wednesday at 61,294 points and sank below 61,000 points; meanwhile, Nifty-50 also traded flat initially at 18,230 points but fell near the 18,100 level and Nifty Bank also plunged after opening close to the 43,500 mark.

As of 1:10, Sensex lost more than 500 points or 0.9% to 60,768 points, whereas Nifty is trading below 18,100 points, down 160 points or 0.9% and Bank Nifty plunged more than 350 points or 0.9% to 43,066 points.

Commenting on a near-term trend, Siddhartha Khemka, Head of retail Research at Motilal Oswal Financial Services Ltd, said, “Domestic equities ended Tuesday’s session near the day’s high following their global peers as the reopening of China’s economy has outweighed near-term fear. We expect the market to remain in a range with a positive bias ahead of the FOMC minutes outcome and release of US manufacturing PMI data on Wednesday.”

Wall Street ended slightly lower and continued to underperform on Tuesday as higher interest rates to combat an inflationary environment fueled the fear of an economic downturn. The Dow closed 11 points or 0.03% lower, while S&P 500 dropped 15 points or 0.4% and Nasdaq lost 80 points or 0.8%.

Ahead of Wednesday’s session, investors will be waiting for FOMC meeting minutes, Job Openings and Labor Turnover Survey and US’s manufacturing PMI. From what we have seen so far, Fedis unlikely to go easy on inflationthis year as well and the Fed is expected to maintain a hawkish tone in its meeting minutes.