Indian equity benchmark indices Sensex and Nifty declined sharply on Thursday morning tracking weak overnight cues from the US markets, dashing hopes of revival this week.
"Indian benchmark indices are set to face heavy turbulence today amid negative global market cues. US markets saw the worst sell off since June 2020 as inflation fear looms," said Mohit Nigam, Head - PMS, Hem Securities just before the market opened.
Indian economy is set to face jitters due to rising inflation in the US thus, making further interest rate hikes all the more important, Nigam added.
At 9.17 a.m., Sensex was 1.8 per cent or 956 points down at 53,251 points, whereas Nifty 1.6 per cent or 265 points at 15,975 points.
Besides, equities in other Asian markets too fell after stocks in Wall Street suffered a slump as worries increased about inflation and corporate earnings.
Previous session's closure
On Wednesday, erasing the entire opening session gains and snapping two-day rally, Indian equity benchmark indices closed marginally in red.
Inflation rate hitting 40 years high in the UK also dented investors sentiment back home during the afternoon trade. Inflation though is a concern in almost all major economies.
Sensex closed at 54,208.53 points, down 109.94 points or 0.20 per cent, whereas Nifty at 16,240.30 points, down 19.00 or 0.12 per cent.
"UK's soaring retail inflation number along with (the US) Fed Chair's reassurance on bringing down the inflation, disturbed the sentiment, risking sharper rate hikes," Vinod Nair, Head of Research at Geojit Financial Services, said.
With prospects of a sizable interest rate hike by the global central banks, investors are advised to allocate higher weightage to sectors that are least affected by such policies, Nair added.
"The resistance on the higher end is placed at 16,400. On the lower end, support is visible at 16,000," Rupak De, Senior Technical Analyst at LKP Securities, said on Nifty's outlook.
(With inputs from IANS)
