Equity benchmark indices nosedived in early trade on Wednesday, with the Sensex slumping more than 675 points amid negative cues from global markets. This drop came as higher-than-expected inflation numbers in the US rattled investor sentiments. The broader 50-share Nifty took a hit, tumbling 187.85 points or 0.86 percent to 21,555.40 points, while the 30-share Sensex crashed 675.79 points or 0.94 percent to 70,879.40 points.
The latest US inflation data has disrupted expectations regarding when the Federal Reserve might initiate interest rate cuts. Twenty-seven scrips in the Sensex index witnessed declines, with major losers including Infosys, Tech Mahindra, Wipro, HDFC Bank, and TCS. In the Nifty pack, 44 stocks were in the red.
Deepak Jasani, Head of Retail Research at HDFC Securities, commented on the situation, stating that January's hotter-than-expected US inflation report caused turmoil in the financial market on Tuesday, reshaping investors' expectations about the timing and extent of potential interest rate cuts by the Federal Reserve.
In the US, the consumer price index rose by 0.3 percent in January, with the core rate (excluding volatile food and energy costs) rising by 0.4 percent, slightly surpassing Wall Street expectations.
Asian markets demonstrated mixed trends on Wednesday, as Japan's Nikkei 225 and Hong Kong's Hang Seng indices traded lower, while China's SSE Composite Index gained over 1 percent.