Sensex down 851 pts, Nifty holds 17,350

The benchmark indices continued to trade near the day's low in early afternoon trade. All the sectoral indices on the NSE were in the red. IT and consumer durables stocks were under pressure.

At 12:30 IST, the barometer index, the S&P BSE Sensex, dropped 851.21 points or 1.44% at 58,074.82. The Nifty 50 index lost 253.50 points or 1.44% at 17,352.35.

In the broader market, the S&P BSE Mid-Cap index fell 1.21% while the S&P BSE Small-Cap index slipped 1.18%.

The market breadth was weak. On the BSE, 865 shares rose and 2,339 shares fell. A total of 101 shares were unchanged.

Weak global cues spoiled investor sentiment as the higher-than-expected US inflation data raised fears of aggressive rate hikes by the US Federal Reserve.

Yield on the 10-year US Treasury note ended above 2% for the first time since August 2019 after US inflation came in higher than expected. US consumer prices rose at an annual rate of 7.5% in January, which was the highest print since February 1982. Further, St. Louis Federal Reserve Bank President James Bullard said that the data had made him "dramatically" more hawkish and that he now wanted a full percentage point of interest rate hikes by Jul 1.

Investors are fully pricing in a rate hike of at least 25 basis points from the Fed at its Mar 15-16 policy meeting, and forecasting a significant chance of a 50 bps hike.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 7.63% to 19.0625. The Nifty 24 February 2022 futures were trading at 17,337.95, at a discount of 14.40 points as compared with the spot at 17,352.35.

The Nifty option chain for 24 February 2022 expiry showed maximum Call OI of 25.9 lakh contracts at the 18,000 strike price. Maximum Put OI of 34.6 lakh contracts was seen at 17,000 strike price.

Buzzing Index:

The Nifty Auto index fell 1.20% to 11,534.30. The index lost 1.24% in two sessions.

Balkrishna Industries (down 3.64%), Ashok Leyland (down 2.46%), TVS Motor Company (down 2.34%), Bosch (down 1.93%) and Eicher Motors (down 1.81%) were the top losers in the Auto segment.

Hero MotoCorp rose 0.13%. On a standalone basis, Hero MotoCorp's net profit declined 36.73% to Rs 686.13 crore on 19.36% fall in net sales to Rs 7,883.27 crore in Q3 December 2021 over Q3 December 2020. Parts business continued to do very well at Rs 1,186 crore, with growth of 15%.

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