Highest inflation surge in 40 years in the US had a cascading effect on world markets, including India, on Friday, as investors tried to price in bigger and more frequent interest rate hikes now. Goldman Sachs now expects seven 25 basis point interest rate rises from the US Federal Reserve this year, up from its previous forecast of five. Though the Indian central bank has refrained from any monetary tightening, any Fed rate hike will create pressure in RBI as well. The 30-share pack Sensex dropped 773.11 points or 1.31 per cent to close at 58,152.92. Its broader peer NSE Nifty fell 231.10 points or 1.31 per cent to 17,374.75. Both indices napped three-day winning run. “Aggressive FII selling resulting from negative global cues wreaked havoc in the domestic market today. Globally markets traded in red amid mounting concerns of surging US inflation which fuelled fears of a hawkish rate hike by the central bank,” said Vinod Nair, Head of Research at Geojit Financial Services.