On the 30-share Sensex, losses were led by Trent, HDFC Bank, ICICI Bank, Adani Ports and Bajaj Finserv, with each stock down between 1% and 2%.Sector-wise, government lenders performed better, with the PSU Bank index rising 1.2%. That strength was offset by sharp losses in media stocks, which fell 2%, while private banks, real estate, consumer discretionary, fast-moving consumer goods and healthcare stocks fell between 0.4% and 1%.
The sell-off was broader than that of the benchmark indices, with mid-cap stocks closing the session down 0.5% and small-cap stocks falling 0.7%.
Expert views
Global market signals remain mixed with rising Japanese bond yields pointing to tighter liquidity and pressure on stock valuations, while soft US labor market data adds to recession concerns and reinforces expectations of a more dovish Fed, said Vinod Nair, head of research at Geojit Investments.
“Domestically, the RBI’s efforts to stabilize the rupee have provided support to interest rate-sensitive sectors. Foreign investors are withdrawing funds, and emerging markets are struggling, while developed economies remain strong, showing that investors are becoming more cautious on emerging markets. While currency stability provides temporary relief, global uncertainty and continued foreign selling are keeping upside potential limited, tilting markets towards a bearish bias,” Nair said.
Global markets
The British pound fell on Wednesday after softer-than-expected inflation data reinforced expectations that the Bank of England will cut interest rates, while oil prices recovered from recent losses after US President Donald Trump ordered a blockade of sanctioned oil tankers entering and leaving Venezuela.
Across Asia, risk sentiment was modestly positive. MSCI’s broad index of Asia-Pacific shares excluding Japan rose 0.35% overnight, while Japan’s Nikkei ended the Tokyo session with similar gains.
US stock futures pointed to a slightly firmer open later in the day, with contracts linked to the S&P 500, Dow Jones Industrial Average and Nasdaq all moving higher ahead of the resumption of trading on Wall Street.
In interest rate markets, Fed Funds futures continued to price in roughly two U.S. rate cuts next year as the latest labor market data failed to materially change expectations. Investors are now focused on Thursday’s release of US inflation data for November for clearer direction.
Ten-year U.S. Treasury yields rose 0.5 basis points to 4.15% in early European trading, following some of Tuesday’s 3.5 basis point decline that followed the U.S. payrolls report.
Rough impact
Oil prices rose more than 1% on Wednesday after US President Donald Trump ordered what he described as a “total and complete” blockade of sanctioned oil tankers sailing in and out of Venezuela, injecting new geopolitical risk into markets already uncertain about the prospects for global demand.
Brent crude futures rose 87 cents, or 1.5%, to $59.79 a barrel by 0730 GMT, while U.S. West Texas Intermediate rose 85 cents, also about 1.5%, to $56.12 a barrel.
Rupee vs dollar
The Indian rupee recovered sharply on Wednesday to post its strongest single-day gain in almost two months, after strong intervention by the Reserve Bank of India halted a five-session slide and tamed emerging speculative pressures on the currency.
The rupee was trading at 90.38 against the US dollar, a gain of around 0.7% from Tuesday’s close of 91.0275.
Elsewhere in Asia, currencies came under pressure as the dollar strengthened broadly. The dollar index rose almost 0.4% to 98.6, weighing on peers in the region.
(with input from agencies)
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