Major benchmark Indices fell 2 per cent on Thursday, tracking the fall in global markets. This came on the heels of the central bank’s minutes released on May 18 that stunned investors concerned about a hike in interest rates and sparked corporate earnings. The mood in Asia worsened after Chinese internet giant Tencent fell due to weak earnings. Marketmen are afraid of further downgrade cycle earnings, which the market has ignored. Benchmark BSE Sensex plunged nearly 1,200 points to an intraday low of 52,896, and NSE Nifty 50 closed over 300 points at 15,903. The broader markets also remained weak in line with the frontline indices. India VIX rose 9 per cent to 24, indicating higher panic among investors.
Sector-wise, among all indices, Nifty IT was the biggest loser in business with a decline of over 3 per cent. Besides, Nifty Metal and Nifty Media also sank over 2 per cent each. Meanwhile, the broader markets traded lower, with Nifty Midcap 100 falling over 2 per cent and the Nifty Smallcap 100 falling over 1 per cent.
The Wall Street index closed Wednesday with the Dow Jones down 3.2 per cent, the S&P 500 down 3.6 per cent and the Nasdaq Composite down 4.3 per cent. Shares of US retail giant Target fell 25 per cent to $162 after a sharp fall in growth stocks, its most significant drop since October 19, 1987.
Navin Kulkarni, chief investment officer at Axis Securities, said: “US markets were in the red on Wednesday due to major retailers’ lack of targets and large earnings, which also heightened investor fears that rising inflation could dent profits.”