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Market Selloff Amid Inflation Concerns: Nifty 50 and Sensex Close Lower

Team FS

11/Mar/2024

Key Points:

On Monday, March 11, the domestic equity market witnessed a widespread selloff, with both the Nifty 50 and the Sensex closing the day with losses approaching one per cent.
Market sentiment remains cautious ahead of the release of inflation data in the US and India on Tuesday, as it may impact monetary policy decisions by the Federal Reserve and the Reserve Bank of India (RBI).
Analysts predict a slight increase in February's CPI inflation for both the US and India, potentially influencing central bank actions.
Despite high unemployment rates in the US, a slower-than-expected increase in core inflation could prompt the US Fed to consider rate cuts in the future.
In India, moderate inflation and robust growth suggest the RBI may hold off on rate cuts for the time being.
The selloff resulted in losses across various sectors, with over 100 stocks hitting their 52-week lows on the BSE.

Monday saw a significant selloff in the domestic equity market, with both the Nifty 50 and the Sensex closing the day with losses nearing one per cent. This cautious sentiment stemmed from anticipation of key macroeconomic data, particularly inflation figures set to be released in the US and India on Tuesday. The outcome of these data releases could influence monetary policy decisions by the Federal Reserve and the Reserve Bank of India (RBI), respectively.

According to Reuters, analysts expect a slight increase in February's Consumer Price Index (CPI) inflation for both countries. In the US, despite high unemployment rates, a slower-than-expected rise in core inflation might prompt the Fed to consider future rate cuts. Conversely, in India, moderate inflation coupled with robust economic growth suggests the RBI may delay rate cuts.

The market selloff led to losses across various sectors, with over 100 stocks hitting their 52-week lows on the BSE. The Nifty 50 closed with a loss of 161 points, while the Sensex fell 617 points. Notable losers included Power Grid, Tata Steel, and SBI. The smallcap segment experienced significant losses, with the BSE Smallcap index dropping by 2.01 per cent. Overall market capitalization decreased by approximately ₹3.1 lakh crore in a single session.

Despite the downturn, some stocks managed to gain, with Apollo Hospitals, Nestle India, and SBI Life Insurance Company closing as the top gainers in the Nifty 50 index. However, the majority of stocks ended in the red, with Tata Consumer Products, Power Grid Corporation of India, and Bajaj Auto among the top losers.

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Market Selloff Amid Inflation Concerns: Nifty 50 and Sensex Close Lower

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