Sensex Plunges 800 Points, As US markets See Worst Fall In 2-years

Benchmark indices nosedived in trade today, with the Sensex dropping nearly 800 points and the Nifty falling nearly 200 points on weak global cues.

The fall was largely on the back of hotter than expected inflation data, which saw US markets falling sharply.

Ritika Chhabra- Economist and Quant Analyst, Prabhudas Lilladher on US CPI, " The US inflation in August rose higher at 8.3% y-o-y against expectation of 8.1%. The CPI index increased 0.1% month on month while the economists were expecting it to decline by 0.1% over the month due to sharp correction in energy prices. However, decline in energy prices was offset by higher cost of food (+0.8% m/m) and shelter costs (+0.7% m/m). High costs of food, housing, transportation and other services reiterate the strong consumer demand and elevated service sector price pressures. With inflation being 'stickier' than expected, it is highly likely that the Fed will go for another jumbo rate hike of 75bps in its next FOMC meeting on 21st September."

The Dow Jones Industrial Average slid 1,276.37 points, or 3.94%, to close at 31,104.97. The S&P 500 dropped 4.32% to 3,932.69, and the Nasdaq Composite sank 5.16% to end the day at 11,633.57.

Tech stocks were the hardest hit in trade today with Infosys, HCL Tech, TCS and Tech Mahindra among the big losers in trade. Among the few gainers in trade were Bajaj Auto and Coal India.