Indices snap 4-day rally; big US rate hikes a worry – Blue Barrows

Sensex slid 224 points and Nifty shed 66 points in volatile trade on Wednesday as fears of high inflation and aggressive interest rate hikes halted the four-day rally in the domestic equities amid sluggish global cues.

With global markets awash in red after the US inflation data for August spooked investor sentiments, the 30-share benchmark Sensex and the broader Nifty slipped below the key 60,000 and 18,000 levels, respectively, in the morning trade.

As investors dumped IT, energy and pharma shares, gains in banking scrips helped the market in recovering the lost ground, with Sensex rebounding more than 1,200 points from the early lows to settle at 60,346.97 points.

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In comparison to the closing level on Tuesday, which was also the fourth straight session of gains, the key index shed 224.11 points or 0.37 per cent on Wednesday.

Similar trends were witnessed in Nifty, which declined 66.30 points or 0.37 per cent and managed to end the day at 18,003.75 points. With the higher than expected inflation reported in the US in August, there are now concerns that the US Federal Reserve is likely to go for aggressive rate hikes, pushing global markets into the red.

The rupee declined 35 paise to close at 79.52 against the US currency as higher-than-expected US CPI print resulted in risk-off sentiment among investors.