Indian shares look set to open sharply lower on Monday, tracking weak global markets as bad news on inflation hardened expectations the Federal Reserve will keep raising rates through the September meeting and beyond.
Closer home, wholesale and retail inflation figures due this week will provide more clues on whether the MPC will continue to frontload policy tightening over the coming months.
Industrial activity in April jumped to an eight-month high of 7.1 percent year on year, according to the index of industrial production (IIP) data released by the government on Friday after market hours. However, on a sequential basis, industrial production recorded a decline of 9.2 percent.
Asian markets followed Wall Street lower this morning, with benchmark indexes in China, Hong Kong, Japan and South Korea falling 1-3 percent on inflation and COVID jitters.
The Japanese yen hit a fresh 20-year low against the dollar while gold hovered near one-month highs amid increased economic uncertainties.
Oil prices slipped more than $2 as a flare-up in COVID-19 cases in Beijing quelled hopes for a rapid pick-up in China’s fuel demand.
U.S. stocks closed out their worst week since January with a third straight losing session Friday, as an unexpected jump in inflation added to concerns about faster policy tightening and an impending recession.
Data showed the annual rate of consumer price growth accelerated to 8.6 percent in May from 8.3 percent in April, showing the biggest surge since December 1981.
A measure of U.S. consumer sentiment plunged in early June to the lowest on record, adding to the downbeat sentiment.
The Dow lost 2.7 percent, the tech-heavy Nasdaq Composite plunged 3.5 percent and the S&P 500 tumbled 2.9 percent.
European stocks also closed sharply lower on Friday amid inflation concerns and news of renewed lockdowns in parts of China’s two largest cities.
The pan European Stoxx 600 plummeted 2.7 percent. The German DAX declined 3.1 percent, France’s CAC 40 index gave up 2.7 percent and the U.K.’s FTSE 100 shed 2.1 percent.
Market Analysis
Sensex, Nifty Poised For Gap-down Open On Inflation Worries
2022-06-13 02:50:33
