US inflation hits 40 year high at 8.6%, Indian Rupee hits all time low of 78.22 against USD

Stock Price: US inflation hits 40 year high at 8.6%, Indian Rupee hits all time low of 78.22 against USD
Stock Price (Image: Canva)

Today the Indian Stock Market Index Nifty fell by 2.89% to 15732.10 and Sensex fell by 2.96% to 33311.55. In intraday trading, the Indian rupee closed at an all-time low of 78.22 due to the rise in the price of crude oil and the rise in the dollar.

Globally, central banks are continuously increasing their benchmark interest rate to control rising inflation.

On June 8, 2022, the Reserve Bank of India hiked the interest rate by 50 basis points to 4.90%, after which both Nifty and Sensex fell by more than 2%.

FIIs have been a continuous net seller in the Indian market since October 2021 and have sell-off more than Rs.275000 crores in 5 months. According to RBI data, India’s foreign exchange reserves stood at $ 601 billion on June 3, 2022.

According to US Consumer Price Index (CPI) data released on June 10, 2022, US CPI inflation reached 8.6% in May 2022 which is a 40-year high.

The stock remained weak in the second quarter as US inflation rose to a 40-year high. US 10-year bond yield has also crossed the level of 3.21%, due to which capital is flowing from equity to debt.

There is a fear of an aggressive rate hike by the US Fed in the market, due to which the global markets are seeing a decline. However, the Fed had said in its last meeting that it would avoid the big rate hike. But experts believe that the Fed may hike the rate by 75 basis points in the coming meeting.

In banking shares, HDFC Bank declined by 3.25% to Rs 1307, Axis Bank declined by 5.62% to Rs 649.65, and Bank of Baroda declined 2.3% to Rs 101.25.

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Metal stocks were the worst hit after the Indian government announced the imposition of heavy export duty on iron ore steel-making raw materials, SAIL declined 7.69% to Rs 71.30, Jindal Steel declined 8.03% to Rs 348.75, Hindalco declined 11.25% to Rs 358.25, and TATA Steel declined 10.91% to Rs 1023.70.

Crude oil prices rose 1.52% to $122.89 per barrel, which is close to a three-month high. India’s import bill is hurting due to the increasing demand for crude oil and lack of supply, which mainly includes petroleum products.

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