The Sensex and the Nifty pared early losses as fresh buying emerged at lower levels in morning trade. At 10:19 IST, the barometer index, the S&P BSE Sensex, was down 174.35 points or 0.51% at 34,172.04. The Nifty 50 index was down 61.20 points or 0.58% at 10,493.10. Trading sentiment, however, was still weak due to negative cues from Asian markets and overnight slump in the US stocks.
Investors were concerned after comments from new Federal Reserve Chairman Jerome Powell revived fears about faster rate rises in the US. In his first public appearance as head of the US central bank on Tuesday, Powell vowed to prevent the economy from overheating while sticking with a plan to gradually raise interest rates. He acknowledged the economy had strengthened recently, a remark that prompted investors to increase bets on four rate increases in 2018. The interest rate hike in the world's largest economy has implications for emerging economies like India in the form of capital outflows.
The Sensex fell 269.94 points, or 0.79% at the day's low of 34,076.45 in early trade, its lowest intraday level since 23 February 2018. The index fell 170.27 points, or 0.50% at the day's high of 34,176.12 in morning trade. The Nifty fell 92.75 points, or 0.88% at the day's low of 10,461.55 in early trade, its lowest intraday level since 23 February 2018. The index fell 55.50 points, or 0.53% at the day's high of 10,498.80 in morning trade.
Among secondary barometers, the BSE Mid-Cap index was down 0.42%. The BSE Small-Cap index was down 0.29%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,299 shares fell and 773 shares rose. A total of 103 shares were unchanged.
Metal shares declined across the board. Jindal Steel & Power (down 1.8%), Hindalco Industries (down 1.76%), Bhushan Steel (down 1.56%), JSW Steel (down 1.48%), Steel Authority of India (down 1.48%), National Aluminium Company (down 1.39%), Vedanta (down 1.03%), Hindustan Zinc (down 0.79%), Tata Steel (down 0.78%), Hindustan Copper (down 0.74%) and NMDC (down 0.61%), edged lower.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for May 2018 delivery was currently down 0.41% at $3.1735 per pound on the COMEX.
Most power sector shares declined. NTPC (down 1.06%), Jaiprakash Power Ventures (down 0.98%), Torrent Power (down 0.91%), Adani Power (down 0.62%), Tata Power (down 0.41%), NHPC (down 0.36%) and Reliance Infrastructure (down 0.11%), edged lower. JSW Energy (up 0.06%), CESC (up 0.33%), Reliance Power (up 0.78%) and GMR Infrastructure (up 2.66%), edged higher.
State-run Power Grid Corporation of India was down 0.96%. State-run Coal India was down 0.8%.
Overseas, Asian stocks fell across the board following a sharp pullback in US stocks after US Federal Reserve Chairman Jerome Powell's hawkish comments to Congress. Weaker than expected economic data from China and Japan also dampened sentiment.
China's official manufacturing purchasing managers' index fell to 50.3 in February from 51.3 in January, government data showed Wednesday. A score above 50 indicates an expansion; below 50 indicates a decline.
Japanese industrial production fell 6.6% in January from a month earlier, following December's 2.9% increase, according to the Ministry of Economy, Trade and Industry.
US stocks ended sharply lower on Tuesday, 27 February 2018, following the first public appearance of Jerome Powell as Federal Reserve chairman, replacing Janet Yellen. Powell conveyed an upbeat picture of the US economy but the market focused on his emphasis on coming rate hikes in 2018 and an end to easy-money policies as the central bank tries to stave off once-dormant inflation.
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