Sensex, Nifty Fall, Tracking Losses On Wall Street, Broader Asian Bourses

Equity benchmarks fell early on Wednesday, tracking a broader weakness in global stocks as investors waited for a key US inflation report which would provide hints to the Federal Reserve’s monetary tightening path.

The 30-share BSE gauge fell over 100 points in the red, and the broader NSE Nifty also was in the red.

Indian financial markets were closed in the previous session on account of Muharram. On Monday, Indian equity benchmarks had extended their gains after logging the third straight weekly rise, going against broader losses in world stock markets.

Both the benchmark indexes on Friday marked their third straight weekly gain, advancing 1.4 per cent each, driven by a return of foreign investors into Indian capital markets after a nine-month hiatus.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.51 per cent, while Japan’s Nikkei extended losses from the previous day and was down 0.65 per cent.

South Korea’s KOSPI lost 0.64 per cent, Australia’s AXJO dropped 0.12 per cent, and Taiwan’s TAIEX fell 0.70 per cent.

“I don’t think that we are through the bear market woods yet – recession risks loom and I don’t think the Fed is done with its aggressive belt tightening,” David Chao, a global market strategist for Asia Pacific ex-Japan at Invesco, told Reuters.

“I don’t think markets have fully discounted these variables. This week’s inflation data will certainly give us more clarity of the Fed’s near-term policy outlook,” he said.

The slips in Asian markets tracked Wall Street, which closed on Tuesday with all three major indices down.

The S&P 500 fell 0.42 per cent, the Dow Jones Industrial Average dropped 0.18 per cent, and the Nasdaq Composite lost 1.19 per cent.

The dollar reversed losses overnight and was trading flat in Asia. The dollar index, which measures the safe-haven greenback against six major peers, was down 0.009 per cent at $106.330.

“A strong CPI print this week could mean the Fed is back to its aggressive rate hiking path, which would re-strengthen the USD,” added Invesco’s Mr Chao.

Oil prices fell slightly after an overnight surge petered out on an unexpected build up in US crude investories, though official data will be released later on Wednesday. Brent crude futures were down 15 cents to $96.16 a barrel, while U.S. West Texas Intermediate (WTI) crude was down 22 cents to $90.28.