New Delhi: Snapping fourth straight session gains, Indian stocks opened Wednesday's trade with a sharp cut on account of consistent red-hot consumer inflation in the US.
Consumer inflation in the US though declined marginally in August to 8.3 per cent from 8.5 per cent in July but is way above the 2 per cent goal.
In the backdrop of the current over four-decade high inflation in the country, the
US Federal Open Market Committee had in its latest meeting raised the key policy interest rate by 75 basis points to 2.25-2.50 per cent, anticipating that the further increase in the interest rates will be appropriate.
The US Federal Reserve in its June meeting too raised the interest rate by 75 basis points, which was then the steepest hike since 1994.
Several officials in the US central bank Federal Reserve recently said that another interest rate hike is imminent during the two-day monetary policy meeting that will start on September 20.
The US markets ended sharply lower on Tuesday after the latest inflation data in the world's largest economy showed a less-than-expected moderation in the price-rise index -- that's at a multi-decade high, said Mohit Nigam, Head - PMS, Hem Securities.
Coming to the domestic indices, at 9.24 am, Sensex traded at 59,977.47 points, down 593.61 points or 0.98 per cent, whereas Nifty traded at 17,904.35 points, down 165.70 points or 0.92 per cent.
Among the Nifty 50 companies, 38 declined and the rest 12 advanced this morning, National Stock Exchange data showed.
"The worse-than-expected CPI inflation data in the US, despite cooling gas prices, was a surprise. Now the market fears that inflation is getting entrenched and an ultra-hawkish Fed might trigger a hard landing for the US economy," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
For fresh cues, investors will await India's wholesale inflation data for August scheduled for release later today.
India's wholesale inflation declined substantially during the month of July to 13.93 per cent from 15.18 in June, but continues to remain in double digits.
The Wholesale Price Index (WPI) based inflation has been in the double-digit for 16 months in a row now.