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Sensex, Nifty rise for four days; Fears of rate hike scare investors

Gains in banking stocks helped the indices recover from early lows but selling in IT, energy and pharma stocks limited the gains.

Gains in banking stocks helped the indices recover from early lows but selling in IT, energy and pharma stocks limited the gains.

The benchmark Sensex fell 224 points on Wednesday, mainly led by selling in IT and pharma counters amid rising concerns over a potentially aggressive interest rate hike to check higher inflation.

The 30-share index closed more than 1,200 points lower before closing at 60,346.97 points, a total loss of 224.11 points, or 0.37%, from Tuesday’s closing level.

The broader NSE Nifty closed 66.30 points or 0.37% lower at 18,003.75.

With higher-than-expected inflation in the US in August, there are now concerns that aggressive rate hikes by the US Federal Reserve are likely to turn global markets in the red.

After deep losses in the US markets, the Sensex fell 1,150 points to a low of 59,417.12 points in early trade on Wednesday, while the Nifty had slipped to a low of 17,771.15 points.

Gains in banking stocks helped the indices recover from early lows but selling in IT, energy and pharma stocks limited the gains.

Infosys was the biggest loser among Sensex stocks, down 4.53%. TCS, Tech Mahindra, HCL Tech, L&T, Wipro, and Reliance were among the major losers.

IndusInd, PowerGrid, NTPC, SBI, Kotak Bank and HDFC Twins advanced.

On the domestic front, wholesale price-based inflation eased for the third consecutive month in August to 12.41% on softening manufactured goods prices. However, August was the 17th consecutive month of wholesale price inflation.

Global stock markets also tumbled after an overnight loss in Wall Street as higher-than-expected inflation raised fears of a rate hike. European benchmarks were marginally lower while Asian markets suffered heavy losses.

US inflation slowed to 8.3% in August, instead of just 8.1% economists were expecting.

Germany’s DAX dropped 0.2% and France’s CAC 40 0.3%, while the UK’s FTSE 10 fell 0.7%.

Tokyo’s benchmark Nikkei 225 declined 2.8%, Hong Kong’s Hang Seng index lost 2.3% and the Shanghai Composite Index lost 0.8%.

Foreign institutional investors infused ₹1,956.98 crore in domestic equities on Tuesday, according to data available with BSE.

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