Indian equities

Indices in the US rose overnight after minutes from the Federal Reserve's latest meeting revealed a strong possibility of two more policy rate hikes in the coming months. At 9.53 a.m., Sensex was up 164 points at 15,393 points, whereas Nifty 29 points at 16,054 points.

Sensex closed at 53,749.26 points, down 303.35 points or 0.56 per cent, whereas Nifty at 16,033.90 points, down 91.25 points or 0.57 per cent."Domestic indices wavered tracking mixed sentiments from the global markets as investors assessed the possibility of a recession in the US followed by the US Fed policy tightening," said Vinod Nair, Head of Research at Geojit Financial Services.

The Sensex closed at 54,052.61 points, down 236 points, or 0.43 per cent, whereas Nifty was at 16,125.15 points, down 89.55 points or 0.55 per cent. Among the sectoral indices, Nifty media, IT, FMCG, metal, pharma, and realty declined the most on Tuesday.

China's cutting of its key lending rate also supported the indices back home. In a bid to stimulate economic activity hit by the latest outbreak of the Covid, the Chinese central bank cut the five-year prime rate by 15 basis points to 4.45 per cent.

The excessive volatility in the market is broadly due to two reasons. One, the market has discounted severe monetary tightening by the Fed which is likely to take the Fed funds rate to around 3 per cent in 2023. Two, the market has not fully discounted the probability of the US economy slipping into recession in 2023.

"The meltdown in the US markets, on the fear of aggressive rate hikes, rattled investors and triggered a weak start. The situation worsened further due to heavy selling in the index majors across sectors wherein IT and metal majors were among the top losers," said Ajit Mishra, VP, Research, Religare Broking.

"Indian benchmark indices are set to face heavy turbulence today amid negative global market cues. US markets saw the worst sell off since June 2020 as inflation fear looms," said Mohit Nigam, Head - PMS, Hem Securities just before the market opened. Indian economy is set to face jitters due to rising inflation in the US thus, making further interest rate hikes all the more important, Nigam added.

Inflation rate hitting 40 years high in the UK also dented investors sentiment back home during the afternoon trade. Inflation though is a concern in almost all major economies. Sensex closed at 54,208.53 points, down 109.94 points or 0.20 per cent, whereas Nifty at 16,240.30 points, down 19.00 or 0.12 per cent.

Sensex closed at 54,318 points, up 1,345 points, whereas Nifty at 16,259 points, was up 417 points. S. Ranganathan, Head of Research at LKP securities, said: "On a day when WPI for April crossed 15 per cent, the 2.7 per cent rise in benchmark indices coupled with the breadth of the rally surprised many on the street despite the move coming after a relentless fall."

The initial public offering of Life Insurance Corporation of India has received robust response from investors as the insurance major's offer has been subscribed 2.89 times. It will be a landmark public issue in the history of the Indian capital market and is poised to be India's biggest IPO till date. The IPO values LIC at Rs 6 lakh crore.