Sensex, Nifty Join The Global Stock Rout On Recession Worries
Indian equity benchmarks opened lower, tracking broader Asian stocks, which fell to the lowest in two years, driven by global recession risks, renewed COVID-19 outbreak in China and the war on the edge of Europe enveloping the entire world into an energy crisis.
The 30-share BSE benchmark declined over 300 points, while the broader NSE Nifty was down more than 0.5 per cent.
MSCI's broadest index of Asia-Pacific shares outside of Japan fell to its lowest level in two years, down nearly 1 per cent, and Japan's Nikkei lost about 2 per cent.
"Caution will be the buzzword for today's trading as overnight US benchmark indices faltered while SGX
Nifty and other Asian gauges too have retreated sharply in early trades," said Prashanth Tapse, Vice President for Research at Mehta Equities.
The capital exodus from assets denominated by almost any other currency and into the safe-haven greenback was evident as the dollar index, which tracks the currency against a basket of six peers, rose to 108.47, the highest since October 2002.
"Risk-off sentiment is dominating global markets," Yuting Shao, Macro Strategist at State Street Global Markets, told Reuters.
Financial markets have been whiplashed this year, and the minor gains Indian stocks made at the end of Monday seems only a blip rather than a broader trend.
The rupee once again declined sharply to a new record low of 79.58 per dollar, just a whisker away from the 80-to-a-dollar rate.
Reuters reported that investors' focus will be on macro data, which includes India's retail inflation reading due later in the day, as well as the consumer price index from the United States on Wednesday.
A spike in inflation would keep central banks on the path of aggressive rate hikes.
Meanwhile, the Reserve Bank of India (RBI) unveiled a payment mechanism for international trade settlements in rupees, with prior approval for banks.
