Closing Bell: Indian market hits a two month low, Nifty falls below 16500
Domestic equity bourses Sensex and Nifty, in line with US, Asian and European markets fell following worries that aggressive rate hikes by central banks world over to check inflation could hurt overall growth.
Indian equity fell sharply as investors showed signs of concern that interest rate hikes to control surging inflation may hit global economic growth. On May 3, the Reserve Bank of India (RBI) raised the repo rate by 40 basis points (bps) to 4.40% in an off-cycle meeting. A repo rate is basically the rate at which a central bank lends money to banks. The US Federal Reserve has also hiked its benchmark overnight interest rate by half a percentage point (50 bps), the largest increase in 22 years, to tackle inflation. Owing to these developments headline indices fell with Nifty closing below 16,500.
At the closing bell on May 6, the Sensex was down 866.65 points or 1.56% at 54,835.58, and the Nifty was down 271.40 points or 1.63% at 16,411.30. On the market breadth, 837 shares have advanced, 2444 shares declined, and 105 shares are unchanged.
Top Nifty losers of the day include Divis Labs, Bajaj Finance, Shree Cements, UPL and Tata Motors, while top gainers were Hero MotoCorp, Tech Mahindra, Power Grid Corp, ITC and ONGC.
Among the sectors, metal and realty indices fell 3% each and IT index was down 2%. However, power index rose by 0.5%, while BSE midcap and smallcap indices fell 2% each.
In global markets, London and Frankfurt opened lower, while Shanghai, Hong Kong and Sydney have declined. Tokyo market climbed as trading resumed after a holiday. On the other hand, Wall Street futures fell after the benchmark S&P 500 index tanked 3.6% on Thursday as optimism evaporated.
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