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Indian stocks decline in early trade on likely further rate hikes in US

Indian stock started negatively on Wednesday because of weak global markets and likelihood of aggressive rate hikes in the US indicated by the Federal Reserve.

Indian stocks decline in early trade on likely further rate hikes in US File Photo

Mumbai: Indian stocks started Wednesday`s trade on a negative primarily due to a lack of any positive cues coupled with a strong likelihood of aggressive rate hikes in the US as indicated by the Federal Reserve. At 9.25 am, Sensex traded at 58,920.55 points, down 276.44 points or 0.47 per cent, whereas Nifty traded at17,578.40 points, down 77.20 points or 0.44 per cent.

Among the Nifty 50 companies, 31 declined and the rest advanced this morning, National Stock Exchange data showed.

"High volatility with downward bias is in store for the markets in the near-term," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"When globally equities correct, India too will correct. But India will fall less since falling crude, decent economic growth, impressive corporate earnings and retail investor enthusiasm will support the market at lower levels.

"Vijayakumar added domestic economy-facing segments like banks, autos, capital goods, telecom and FMCG are relatively strong sectors. For fresh cues, Indian investors now await retail inflation data for July, which will be released around mid-month. India`s retail inflation fell to 6.71 per cent in July, the lowest level in five months, helped by an easing in food and oil prices, as per the National Statistical Office (NSO) data.

However, retail inflation has been over the Reserve Bank of India`s upper tolerance band of 6 per cent for the seventh consecutive month in a row. Retail inflation was at 7.01 per cent in June. Meanwhile, newly-listed Dreamfolks Services declined marginally this morning after a bumper debut on Tuesday.

It had listed with a premium of around 56 per cent over its issue price at Rs 508. Dreamfolks Services is touted as India`s largest airport service aggregator platform. It has an early mover advantage in the airport services aggregator segment.

It claims to control 95 per cent market share in the segment.Notably, the initial public offering (IPO) was fully subscribed within hours of opening for subscription on August 24. At the end of the three-day window for subscription, the shares were subscribed 56.68 times.