Sensex and Nifty Slide from Peak as Inflation Fears Weigh on Markets

Indian stock indices fell on Friday, breaking a three-day winning streak as retail inflation rose to 6.09 per cent in October and sparked worries about a potential RBI rate hike next month. The BSE Sensex dropped 318.56 points to close at 81,592.45, after falling as much as 622.26 points during the session. The Nifty 50 fell 155.05 points to finish at 25,144.30. This marks the first major drop for both key indices this month.

Stock Recommendations

Motilal Oswal Financial Services analyst Chandan Taparia has shared stock picks for investors. He recommends buying shares of MCX with a target price of 3,900 rupees and a stop loss of 3,600 rupees. For BSE shares, the target is 4,170 rupees with a stop loss of 3,820 rupees. Bharti Airtel has a target price of 2,230 rupees with a stop loss of 2,040 rupees.

Market Levels

On the Nifty options front, maximum call open interest sits at the 2,200 and 25,500 strikes, while maximum put open interest is at 25,000 and 25,100 strikes. Taparia notes that option data points to a broader trading range between 24,800 and 25,600, with an immediate range of 25,000 to 25,400.

Context

Stock markets often react negatively to rising inflation figures because higher consumer prices can force central banks to raise interest rates to cool down the economy. When borrowing costs go up, businesses and consumers tend to spend less, which can slow down market growth.