Indian equity benchmarks suffered sharp losses tracking weakness across global markets, after an alarming US inflation reading triggered fears of aggressive rate hikes. A sell-off across sectors pulled the headline indices lower, with financial, IT and consumer stocks being the biggest drags.

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Both indices finished the day down 1.3 percent, recovering some of their intraday losses of 1.7 percent. The Sensex ended 773.1 points lower at 58,152.9 and the broader Nifty50 benchmark settled at 17,374.8, down 231.1 points from its previous close.

During the session, the 30-scrip index tumbled as much as 1,011.9 points to 57,914.1 and the Nifty50 dropped to as low as 17,303.

US consumer inflation stood at a worse-than-expected 7.5 percent in January -- the worst reading in 40 years, data released on Thursday showed. Earlier that day, the RBI maintained key interest rates as well as its stance in a dovish policy statement.

"The Fed may raise rates by at least by 100 basis points this year. A hike of even 50 basis points in March is looking increasingly probable now. This is not good news for global equity markets," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He said the RBI is "singing an ultra-dovish tune by taking a pro-growth risk. This is certainly good for GDP growth and the equity market but it remains to be seen whether its inflation target will be met."

As many as 45 stocks in the Nifty50 pack finished the day in the red. Grasim, Tech Mahindra, Infosys, UPL, HCL Tech, SBI, Kotak Mahindra Bank and HDFC, closing 2-3 percent lower, were the top losers. On the other hand, Indian Oil and IndusInd were among the gainers, up 1.8 percent and 0.5 percent respectively.

Among the heavyweights, Infosys, ICICI Bank, HDFC and TCS were the biggest drags on both indices.

Divi's Labs shares rose 3.7 percent after a strong earnings announcement by by the drug maker, but slipped into the negative zone at the close. The company's net profit for the December quarter jumped 91.7 percent to Rs 902.2 crore, beating Street estimates.

Hero MotoCorp shares fell 0.5 percent for the day after the auto maker's quarterly numbers.

The Zomato stock dropped 6.1 percent to settle at Rs 88.8 after the food aggregator reported its financial results. Morgan Stanley maintained an 'overweight' rating and a target price of Rs 150 for Zomato. The brokerage, however, said it expects it to remain rangebound in the near term.

Adani Wilmar shares gave up the day's gain to finish the session down 0.2 percent at Rs 381 apiece. At the day's high, the stock commanded a premium of 82.6 percent over its issue price.

Broader markets weakened, with the Nifty Midcap 100 and Smallcap 100 indices closing down 2-2.4 percent. Almost 440 stocks on the BSE 500 -- the broadest index on the bourse -- succumbed to negative territory.

From the midcap and smallcap segments, Welspun, Supreme Petro, Birla Corp, Solara Active and Valiant Organics, down around 5-20 percent, were the top laggards. On the other hand, Orient Refractories, NLC, VIP, Schneider and MOIL, up 3-20 percent, were the top gainers.

Global markets

European shares began the day on a negative note as investors globally feared more aggressive rate hikes than anticipated earlier. The pan-European Stoxx 600 index was down one percent at the last count.

S&P 500 futures were down half a percent, suggesting a weak start ahead on Wall Street.

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First Published:Feb 11, 2022 9:55 AM IST