Indian Shares Slip As Russia Mobilisation Compounds Fed Rate Worries
Indian shares ended lower after a choppy Wednesday session, as Russia’s escalation of the conflict in Ukraine further soured the sentiment of investors already bracing for a super-sized interest rate hike by the Federal Reserve
Indian shares ended lower after a choppy Wednesday session, as Russia’s escalation of the conflict in Ukraine further soured the sentiment of investors already bracing for a super-sized interest rate hike by the Federal Reserve.
The NSE Nifty 50 index ended 0.55 per cent lower at 17,718.35, while the S&P BSE Sensex slipped 0.44 per cent to 59,456.78.
Investors fled risky assets after Vladimir Putin ordered a partial mobilisation of Russia’s military reserves and accused the West of “nuclear blackmail,” building anxiety in investors who were already on the sidelines ahead of the Fed’s decision expected later in the day.
Rate futures traders are pricing in an 81 per cent chance of a 75-basis-point (bp) hike and a 19 per cent probability of a jumbo 100 bps increase, as inflation stayed elevated.
Meanwhile, Reuters reported that India’s government was in no hurry to tamp down inflation – now hovering near 7 per cent at an eight-year high – back to the central bank’s 4 per cent medium-term target, for fear that aggressive rate hikes could hurt economic growth.
India’s central bank is due to meet next week to decide on monetary policy.
Putin’s move caused a surge in oil prices on Wednesday, which could prove costly for India, the world’s third-largest importer of oil.
The Nifty Metal index was the worst performer among sub-indexes, dropping 2.1 per cent in its worst day in a month.
Conglomerate Adani Enterprises, which touched a record high in the previous session, lost 5.1 per cent, marking its worst session since mid-June.
Shree Cement was the biggest percentage loser on the Nifty 50 with a 5.2 per cent drop – its sharpest fall since late-February.
The Nifty fast-moving consumer goods index was the only bright spot, rising 1.2 per cent led by a near 3 per cent jump in FMCG major Britannia Industries.
Central Bank of India rose 6.6 per cent, after jumping as much as 15 per cent in the session, following an RBI move to take the state-owned lender off its prompt corrective action list.