Indian markets plunge on concerns over rising inflation in the US

• Sensex went down sharply by 900 points in the early market hours mirroring some of the losses in other Asian markets.
• Concerns over the US Fed hiking its interest sooner and aggressively remain elevated as the latest US data showed rise in inflation at a 40-year high.
• Shares of IT, banks, FMCG and infrastructure stocks saw a huge sell-off.

Indian markets slipped sharply on February 11 as investors got concerned over the US Fed aggressively raising its interest rates soon after inflation in the US reached a 40-year high.

Benchmark indices Sensex and Nifty 50 plunged close to 2% each on Friday.

This led to weakness across global markets as even US Treasury yields also went up. Not just today, but markets have been under pressure for more than a month now on fear of a liquidity shift from emerging markets when US hikes the interest rates.

Because of high inflation, the US central bank has been looking to stop measures for economic stimulus and increase interest rates sooner than expected. Rise in the US interest rate does not bode well for the Indian markets, which have seen strong foreign inflows because of pandemic-led easy monetary policies in the US till now.

Shares of technology companies, banks, fast moving consumer goods (FMCG) and infrastructure stocks saw a huge sell-off.

Top losers	% change as of 10:40 a.m.
Grasim Industries	-3.45%
Infosys	-2.82%
Tech Mahindra	-2.71%
Nestle India	-2.49%
Britannia Industries	-2.46%
Bajaj Finance	-2.18%
Wipro	-2.45%
Larsen & Toubro	-2.29%
Titan	-2.09%
HDFC	-2.08%

This comes ahead of the most awaited public issue of Life Insurance Corporation (LIC) that is expected to boost investor participation in the market. Analysts say that since LIC will be one of largest initial public offerings (IPO) in the country, all categories of investors — mutual funds, insurance companies, individual investors — will be subscribing to the IPO. This means that investors might be keeping aside some money for the large IPO.

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