Nifty Slips Below 18,000 For First Time Since November, Extending Losses For 4th Straight Day

Indian equity benchmarks plunged to their lowest since late October on Friday, extending their losses for the fourth straight session, reflecting a sell-off in Wall Street stocks overnight after data showed economic resilience and reinforced the Federal Reserve's higher for longer interest rates rhetoric.

The BSE Sensex crashed 491.15 points, or 0.81 per cent, to 60,335.07 in early trade, and the broader NSE Nifty index fell below 18,000 for the first time since November, and was last down 145.95 points, or 0.81 per cent, at 17,981.40.

Almost all sectoral indices dropped. The only exception was the pharmaceutical index, which rose 1.36 per cent on speculation that India is prepared to increase fever drug exports to China.

Forty-four of the Nifty 50 components fell. Health-related equities including Cipla, Sun Pharma, and Dr. Reddy's were among the few gainers.

The Sensex pack's main laggards included Tata Motors, Tata Steel, State Bank of India, Infosys, HDFC, HDFC Bank, Bajaj Finance, and Power Grid.

Gains were reported by Sun Pharma, Reliance Industries, Nestle, and Tata Consultancy Services.

Asian markets eased on Friday, mirroring a decline on Wall Street and the dollar strengthened on Friday as solid US data stoked concerns that the Fed will need to maintain its hawkish stance in order to contain inflation.

The largest Asia-Pacific share index outside of Japan, as measured by MSCI, fell in Asian trading hours, ending a two-day gaining streak. The Nasdaq, which is heavily weighted toward technology, fell 2 per cent as the major indexes on Wall Street closed lower on Thursday.

Weekly unemployment benefits claims data from the United States indicated that the labour market remains tight, and the third quarter's economic recovery was more rapid than anticipated.

The data from the United States "flamed fears that further monetary policy tightening in 2023 will be necessary to cool inflation," Tony Sycamore, a Market Analyst at IG, told Reuters.

Those positive data points, which would often be seen favourably, has increased investor concerns that the Fed funds target rate may rise higher and remain there longer than anticipated, increasing the likelihood of an economic slowdown.

In the energy market, oil was on track for a significant weekly increase as traders awaited Russia's response to the Group of Seven's restriction on its oil and China's switch from Covid Zero improved the outlook for demand.