Rising Inflation Fears Globally Cause Markets to Drop

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Rising Inflation Fears Globally Cause Markets to Drop
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- Nifty and the BSE Sensex closed down 0.67% and 0.64% respectively ahead of the latest US inflation numbers on Thursday. Markets have been wary this week and the inflation data is one of the last and biggest numbers before the US Fed meets next week. A high number could force the US Fed to increase rates which could have a cascading effect around the world.

Market experts say that 15,600 is a strong resistance point for Nifty though they have warned that it could fall as much as 15,300.

Auto and financial stocks took a hit today. Tata Motors (NS: TAMO ), Adani (NS: APSE ) Ports and Shree Cement lost over 2% each while L&T (NS: LART ) and Reliance Industries (NS: RELI ) lost over 1.5% each. Nifty Bank dropped 0.81% today.

Power Grid (NS: PGRD ) gained almost 4% while SBI (NS: SBI ) Life Insurance Company Ltd (NS: SBIL ) and NTPC (NS: NTPC ) ended up over 1.5% each.

Asian markets ended mixed with Nikkei 225 and KOSPI 50 ending lower 0.35% and 0.97% while Shanghai Composite closed up 0.32%. China's factory-gate prices rose at their fastest annual pace in over 12 years in May, driven by surging commodity prices, highlighting the mounting global inflation pressures. This is a major reason that markets are on tenterhooks.

US stocks are expected to be largely unchanged on Wednesday, with investors holding off on taking major positions ahead of an important US inflation reading later this week. US futures are mixed with Dow futures down 0.09% while S&P 500 Futures and Nasdaq 100 Futures are up 0.04% and 0.17%.

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  • Suhas Kalgutkar @Suhas Kalgutkar
    I expect both nifty and Banknifty shall first go up and trade between their respective support and resistance as grid continued.
    Like 2
  • Manju Bdr @Manju Bdr
    It is volatile for fee days and wr may expect bit fall
    Like 0
  • SA VA @SA VA
    Easy to post such article after market hours.. Zero Value article. If it was due to US inflation prediction, why Dow future was green at the time of fall in Indian market ? and why other markets were also not falling with such magnitude ?  It was just game of option writers. as Simple as it is.
    Like 4
  • Laxman K Pillay @Laxman K Pillay
    Although the US Fed has agreed not to raise the interest rates in the short term and increasing inflation is an expected event, an article of this sort implies nothing but the market makers booking profit and expect the wider population to sell. The goats don't have much to say in a lions game. :-)
    Like 3
  • Vinayak Vanjre @Vinayak Vanjre
    What about bank nifty for tomorrow i have taken 34800PE 10jun - 2 lot
    Like 1
    • Rupam Saha @Rupam Saha
      M with u bro.. Bt m with a larger gap of 34400 PE. Am expecting the market to fall in 1st half...
      Like 0
    • SA VA @SA VA
      @Vinayak Vanjre tomorrow like last 2 expires, market will be side bound.. even if it open at 34750 your pe will be down.. chances of big down gap opening are not much. Try to take position on Thursdays after 12.30 to face minimum premium erosion.
      Like 0
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