Sensex Crashes 1500 Points, As Aggressive Fed Fears Causes Tremors Across Global Markets

Benchmark indices came crashing down in trade as US Inflation data came in hotter than expected, re-igniting fears of a faster and more aggressive interest rates hikes by the US Fed.

The US Federal Reserve meeting is expected to take a decision on interest rate hikes this week and the higher than anticipated inflation reading, has led some analysts to believe that the US Fed could hike interest rates by as much as 75 basis points. A 50 basis points hike in the US Fed Fund rates was almost a given, until last week's inflation reading.

Stocks fell sharply across Asia, in Monday morning trade, with Japan's Nikkei 225 and the Kospi in South Korea both falling nearly 3% as technology stocks fell.

The Sensex followed Asian peers, lower with the Sensex crashing 1467 points, while the Nifty fell 421 points in trade at 15,780 points. Stocks fell across the board, with IT stocks and banking stocks being the worst impacted. Among the stocks that saw the maximum damage from the Nifty included stocks like HDFC, L&T, Infosys, HDFC Bank and Hindalco. All of these stocks saw cuts of near 3%, with HDFC dropping as much as 4%.

Shares in LIC dropped 3%, after the lock-in period for anchor investors in the country's largest initial public offering (IPO) ended. Strides Pharma shares fell after reports that the company is recalling over six lakh bottles of blood pressure lowering drug Losartan Potassium tablets in the US market. Analysts believe that the markets would continue to move lower, as interest rates across the globe move higher. In India too, the RBI has raised interest rates and investors may now find bank deposits more lucrative and move money there.