MUMBAI: Indian stocks opened with deep cuts, in line with Asian peers. The Nifty and Sensex opened a gap down 2% each at 15877.55 and 54303.44.
Rising inflation and the war in Europe have stoked stagflation and recessionary fears globally, with companies in India likely to be affected by input price pressures. The relatively high valuations of financial services, metals and IT companies add to the risk, especially as central banks raise rates and change policy stance.
Fear gauge India Vix rose 8.6% to 21.26 while Nifty and Sensex trading lower than their opening prices. Losses were led by Hindalco, Bajaj Twins and ICICI Bank with all 50 stocks trading in the red.
FIIs have sold a whopping Rs 1.8 lakh crore of Indian shares year to date. The March low of 15671 looks at risk of being taken out as per Hormuz Maloo, director, AFco Investments.
The rupee traded 37 paise down at 78.21.
Churchil Bhatt, EVP, Debt Investments, Kotak Mahindra Life Insurance Company said, "It's natural for Emerging Market currencies to weaken during risk-off sentiments. High oil import bills and FPI equity outflows are key market drivers at this point. While the Reserve Bank of India has sufficient reserves to manage any undue volatility, INR may be expected to move in line with its Asian peers. We expect INR to exhibit a near-term bias for orderly depreciation towards 80 levels."