On fears of a recession, the Sensex and Nifty join the global stock rally

India’s stock market began lower, reflecting the decline in broader Asian stocks, which reached their lowest level in two years.

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The global recession risks, a resurgence of COVID-19 in China, and the war on the outskirts of Europe that is engulfing the entire world in an energy crisis are what caused Indian equity benchmarks to open lower on Monday. These stocks, which track broader Asian stocks, fell to their lowest levels in two years.

While the larger NSE Nifty was down more than 0.5%, the 30-share BSE benchmark dropped more than 300 points.

The Nikkei in Japan lost about 2%, while the largest MSCI index of Asia-Pacific shares outside of Japan sank to its lowest level in two years.

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“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 dollar index, which measures the value of one currency against a basket of six others, increased to 108.47, the highest level since October 2002, demonstrating the capital flight from assets denominated in virtually every other currency and into the safe-haven dollar.

“Risk-off sentiment is dominating global markets,” Yuting Shao, Macro Strategist at State Street Global Markets, told Reuters.

Due to the volatility of the financial markets this year, the modest advances Indian stocks made at the end of Monday appear to be a one-off event rather than a longer-term trend.

Again falling hard against the dollar, the rupee hit a fresh record low of 79.58 just before the rate reached 80.

Investors’ attention will be on macrodata, according to Reuters, which includes the consumer price index from the United States on Wednesday and India’s retail inflation number due later in the day.

Increases in interest rates would continue if inflation rose sharply.

In the meantime, the Reserve Bank of India (RBI) unveiled a payment system for rupee settlements in international trade, with previous bank permission.