US STOCKS- Nasdaq falls more than 3% as US inflation data gives little relief to investors US stocks ended sharply lower on Wednesday, with the Nasdaq dropping more than 3% and the Dow falling for a fifth straight day after U.S. inflation data did little to ease investor worries over the outlook for interest rates and the economy. The benchmark S&P 500 lost 1.7% and is now down 18% from its Jan. 3 record closing high. The CPI increased 0.3% last month, the smallest gain since last August, while economists polled by Reuters had forecast consumer prices gaining 0.2% in April. “It did not dispel the notion that there’s more to go in terms of reining in inflation,” said Quincy Krosby, chief equity strategist at LPL Financial in Charlotte, North Carolina. “The market is trying to make sense of whether we’re also going to see growth pullback more than expected” as the Fed raises rates, she said. Apple shares dropped 5.2% and were the biggest weight on the Nasdaq and S&P 500 indexes. “There is much focus right now on Apple,” Krosby said. “Given its weighting, Apple is the bellwether for the market from many perspectives.” Investor concerns about whether the Fed will continue to hike interest rates aggressively have hit growth stocks especially hard. The consumer discretionary and technology sectors fell about 3% each, leading S&P 500 sector declines. The Dow Jones Industrial Average fell 326.63 points, or 1.02%, to 31,834.11, the S&P 500 lost 65.87 points, or 1.65%, to 3,935.18 and the Nasdaq Composite dropped 373.44 points, or 3.18%, to 11,364.24. The Dow’s five-day decline was its longest losing streak since mid-February. Energy shares ended higher and helped to limit some of the declines in the S&P 500 and Dow. Exxon Mobil Corp shares were up 2.1%. Value outperformed growth shares in general. The S&P growth index was down 2.8% on the day versus a 0.5% decline in the S&P value index. Investors are anxious to see more data on inflation Thursday, when U.S. producer price index data is due.Stocks have fallen this year following the rate concerns, as well as the Ukraine war and the latest coronavirus lockdowns in China. Coinbase Global Inc slid 26.4% after its first-quarter revenue missed estimates amid turmoil in global markets that has curbed investor appetite for risk assets. Volume on U.S. exchanges was 15.38 billion shares, compared with the 12.75 billion average for the full session over the last 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a 2.16-to-1 ratio; on Nasdaq, a 3.70-to-1 ratio favored decliners. The S&P 500 posted 1 new 52-week highs and 67 new lows; the Nasdaq Composite recorded 10 new highs and 1,221 new lows.
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.