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In Wednesday’s turbulent session, Wall Street equities fell dramatically and Treasury yields plummeted as oil prices rose and investors worried about the possibility of an economic slowdown. During the tumultuous day, US market indexes fluctuated higher and lower as investors analysed US inflation data for indications on the Federal Reserve’s rate hike path.
The Dow Jones Industrial Average sank 326.63 points, or 1.02 percent, to 31,834.11, the S&P 500 dropped 65.87 points, or 1.65 percent, to 3,935.18, and the Nasdaq Composite plunged 373.44 points, or 3.18 percent, to 11,364.24.
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Markets in Asia
After a 1.2 percent gain in March, the CPI rose only 0.3 percent in April, but excluding volatile food and energy commodities, the index increased 0.6 percent, double the rate in March, according to the study.
Inflation and the global recession have caused Morgan Stanley to lower India’s growth predictions.
Morgan Stanley has cut its economic growth predictions for India over the next two fiscal years, citing a global slowdown, rising oil prices, and sluggish local demand as factors weighing on Asia’s third-largest economy. The firm predicted in a note dated Tuesday that GDP growth will be 7.6% in fiscal 2023 and 6.7 percent in fiscal 2024, which is 30 basis points lower than earlier predictions.
Oil prices surged more than 5% on Wednesday as Russian gas deliveries to Europe decreased and Russia sanctioned certain European gas businesses, adding to global energy market turmoil.
Brent crude rose $5.05 a barrel, or 4.9 percent, to $107.51 a barrel, while US West Texas Intermediate crude rose $5.95 a barrel, or 6%, to $105.71.
Annual inflation in the United States fell in April, with consumer prices rising 8.3%.
According to government data released Wednesday, US consumer price inflation slowed somewhat last month, rising 8.3 percent compared to April 2021. According to the Labor Department, the annual growth in the consumer price index (CPI) peaked in March at 8.5 percent, but decreased last month due to lower energy expenses.
The reduction reflects the significant economic impact of the Russia-Ukraine conflict, which has pushed up crude prices and pushed retail inflation in India, the world’s third-largest oil importer, to its highest level in 17 months.
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“Higher inflation, weaker consumer demand, tighter financial conditions, the negative impact on business mood, and a delay in capex recovery would likely be the main channels of impact,” said Upasana Chachra, Morgan Stanley’s chief economist for India.
The RBI may raise its inflation prediction at the upcoming MPC meeting; a rate hike is likely: Sources
According to reports, the Reserve Bank will likely enhance inflation predictions at its next Monetary Policy Committee (MPC) meeting and may contemplate a rate hike to contain inflation that is above its comfort level.
The MPC, which is chaired by the RBI Governor, will convene between June 6 and June 8. It is required to manage retail inflation between 2 and 6 percent. The MPC will review the inflation scenario at its next meeting, according to sources. In an off-cycle meeting earlier this month, the MPC did not change its inflation forecasts.
In April, passenger car dispatches fell 4% due to supply constraints: SIAM
Passenger vehicle dispatches from factories to dealers in the domestic market fell 4% in April as the automotive sector’s supply side issues persisted, according to industry organisation SIAM.
Last month, total passenger vehicle domestic wholesales were 2,51,581 units, down from 2,61,633 units in April 2021. Last month, 1,12,857 passenger cars were dispatched, compared to 1,41,194 vehicles the previous month. Utility vehicle wholesales, on the other hand, grew to 1,27,213 units from 1,08,871 the previous year.
Data from FII and DII
According to provisional data available on the NSE, foreign institutional investors (FIIs) net sold shares worth Rs 3,609.35 crore on May 11, while domestic institutional investors (DIIs) remained net purchasers, buying shares worth Rs 4,181.20 crore.
NSE stocks with a F&O prohibition
For May 12, one stock, Indiabulls Housing Finance, is subject to a F&O ban. Companies in the F&O category that have crossed 95 percent of the market-wide position limit are included in the securities in the ban period.
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