Indices fall for the fourth day in a row as global equities markets tumble and FPIs retreat

The benchmark Sensex and Nifty indices dropped for the fourth day in a row on Wednesday, extending their month-to-date decline to over 5 per cent amid a global equity rout and sustained pull-back by foreign portfolio investors (FPIs).

The US Federal Reserve’s (Fed’s) decision to aggressively hike interest rates and reduce balance sheets to catch up with inflationary pressures has wreaked havoc across risky assets in recent weeks. Add to that, global growth concerns due to China’s Covid-management approach and jump in commodity prices attributable to the disruption in supply chains caused by the Russia-Ukraine conflict.
On Wednesday, the Sensex closed at 54,088 points, down 276 points or 0.51 percent.

The Nifty ended the day at 16,167, down 73 points or 0.45%.

Both indicators closed at their lowest levels since March 8. Both indices are down roughly 12% since the year’s top in January.

Other worldwide markets have fallen even faster. The MSCI Emerging Markets (EMs) Index, for example, is down 28% from its peak in February last year, while MSCI China has more than halved.

India is one of the most expensive emerging markets. In addition, due to its large reliance on imports, India has the weakest profit revision. Due to margin pressure caused by rising prices, several leading Indian corporations failed to reach consensus earnings projections in the March quarter.

According to Bloomberg, 11 of the 28 Nifty50 companies that have released earnings thus far have missed projections, while 17 have at least met them. Cipla and Asian Paints were the most recent companies to declare profits that fell short of expectations.

On Wednesday, only nine Sensex components rose, while 22 fell. Larsen & Toubro, Bajaj Finserv, and Bajaj Finance all lost more than 2% of their value. Axis Bank and IndusInd Bank both gained 1.9 percent and 1.4 percent.

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