Sensex slumps over 300 pts in early trade; Nifty drops below 18,000

Mumbai: Equity benchmark Sensex tumbled over 300 points in early trade on Thursday tracking losses in index-majors HDFC twins, ICICI Bank and Infosys amid a largely negative trend in global markets and sustained foreign fund outflow.

The 30-share index was trading 303.07 points or 0.50 per cent lower at 60,049.75 in initial deals. Similarly, the Nifty fell 102.60 points or 0.57 per cent to 17,914.60.

Tech Mahindra was the top loser in the Sensex pack, shedding around 2 per cent, followed by HDFC, SBI, Nestle India, Axis Bank, HCL Tech and ICICI Bank.

On the other hand, Titan, Tata Steel, L&T, Bharti Airtel and Maruti were among the gainers.

In the previous session, Sensex ended 80.63 points or 0.13 per cent lower at 60,352.82, and Nifty fell 27.05 points or 0.15 per cent to 18,017.20.

Foreign institutional investors (FIIs) were net sellers in the capital market, as they offloaded shares worth Rs 469.50 crore on Wednesday, as per exchange data.

“Rising inflation is emerging as a threat to the global equity rally, at least in the short-term,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Consumer price inflation in the US has risen to a 30-year high of 6.2 per cent, year-on-year, in October. In China, too, producer price inflation has risen to 13.5 per cent. This has the potential to spill over to global commodity inflation, he cautioned.

Sensing the danger ahead, the US 10-year yield rose to 1.57 per cent.

“The Fed still believes that the spike in inflation is caused by supply-side issues and, therefore, is transient. But there are many who believe that the Fed is behind the curve and that the entrenched inflation will force the Fed to accelerate tapering and advance rate hikes.

“If this scenario is to unfold, there can be a sell-off and sharp corrections in markets, globally,” he said.

Elsewhere in Asia, bourses in Hong Kong and Seoul were trading with losses in mid-session deals, while Shanghai and Tokyo were positive.

Major indices on Wall Street ended on a negative note in the overnight session.

Meanwhile, international oil benchmark Brent crude rose 0.23 per cent to USD 82.83 per barrel.