Sensex drops 778 pts, Nifty slides below 15,400

The headline equity indices further extended losses in afternoon trade amid weak global cues. The prospect that the US Federal Reserve and other central banks will be forced to hike interest rates more aggressively has reignited fears of a global recession. The Nifty slipped below the 15,400 mark. Barring the Nifty PSU bank index, all the other sectoral indices on the NSE traded in the red.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was down 777.65 points or 1.48% to 51,754.42. The Nifty 50 index declined 244.50 points or 1.56% to 15,394.30.

In the broader market, the S&P BSE Mid-Cap index lost 1.49% while the S&P BSE Small-Cap index declined 1.12%.

The market breadth was weak. On the BSE, 1114 shares rose and 2096 shares fell. A total of 118 shares were unchanged.

UPL (down 6.18%), Hindalco Industries (down 5.81%), ONGC (down 5.61%), Tata Steel (down 4.29%) and JSW Steel (down 4.26%) were major Nifty losers.

BPCL (up 1.33%), Hero Motocorp (up 0.84%) and Hindustan Unilever (up 0.10%) were Nifty gainers.

Global cues:

Shares in Europe and Asia tumbled on Wednesday, amid fears over surging inflation and slowing economic growth.

In Europe, U.K. inflation hit a new 40-year high of 9.1% year-on-year in May as soaring food and energy prices continue to deepen the country's cost-of-living crisis.

The Bank of Japan, after maintaining its ultra-low interest rates last week, released the minutes from its April monetary policy meeting on Wednesday. Many members expressed the view that underlying inflation, measured by the CPI excluding such factors as energy, remained relatively low, the minutes said. Most members of BOJ policy board expect short-term and long-term interest rates to remain at their present levels or lower, the minutes added.

Meanwhile, futures contracts tied to the Dow Jones Industrial Average were down 485 points or 1.59%, while Nasdaq 100 futures fell around 1.99%.

During regular trading Tuesday, the Dow surged 641 points, or 2.15%. The S&P 500 added 2.45%, turning in its best day since May 4. The jump comes after the benchmark index slumped 5.79% last week in its worst weekly performance since March 2020.

Fed Chair Jerome Powell will testify before Congress Wednesday and Thursday. His appearance comes after a recent rate hike by three-quarters of a percentage point, the central bank's biggest increase since 1994.

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