The domestic indices opened in green on Thursday but the upbeat sentiment could not create a sustained momentum amid surging fear of global recession, the worrying trend of Covid-19 in China and the tightening monetary policy outlook by RBI.
The BSE Sensex opened at 61,257 points and gave up 268 points or 0.44%; the NSE Nift-50 opened at 18,288 points and lost 80 points or 0.44 as of 3:00 PM.
Nifty Bank Index also experienced a significant decline after touching an all-time high of 44,151 points last week. It started trading in green at 42,864 points but lost 192 points or 0.4% from the previous close of 42,617 points.
Prashanth Tapse, Research Analyst and Senior VP (Research) at Mehta Equities Ltd., said, "investors need to be careful of the sharp intra-day volatility seen in the last few sessions due to growing uncertainty over rising covid cases in China and recessionary fears in key economies with more interest rate hikes going ahead further adding to the concerns. Other factors such as rising oil prices and dollar gaining strength could dampen market sentiment."
Wall Street stocks ended in green on Wednesday's trading session as consumer confidence boosted the market. The Dow Jones Industrial Average gained 526.74 points or 1.6%, S&P 500 added 56 points or 1.5%, and the tech-heavy Nasdaq Composite was also up 162 points or 1.54%.
On top of the risk of recession, most members of the Monetary policy committee (MPC) affirmed that the fight against inflation is not over. In his statement, Shaktikanta Das wrote, "A premature pause in monetary policy action would be a costly policy error at this juncture. Given the uncertain outlook, it may engender a situation where we may find ourselves striving to do a catch-up through stronger policy actions in the subsequent meetings to ward-off accentuated inflationary pressures."
