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Bears kept a grip on the market on Friday with benchmark indices closing over 1 per cent lower amid weak global cues.
Market opened on a weak note, tracking negative global cues after a sell-off in the US market and slipped further during the early trade. Investor sentiments were negatively impacted as the inflation rose to a 40-year high in the US, with analysts fearing that the US Fed will turn more hawkish by raising the interest rates 50 bps in March. Though off the day’s low by afternoon, indices extended losses during late hours, closing lower amid broad-based selling.
The BSE Sensex closed at 58,152.92, down 773.11 points or 1.31 per cent. It recorded an intraday high of 58,447.15 and a low of 57,914.10. The Nifty 50 closed at 17,374.75, down 231.10 points or 1.31 per cent. It recorded an intraday high of 17,454.75 and a low of 17,303.00.
Nearly 2400 stocks decline
The breadth of the market was in favour of the decliners with 2,378 stocks declining, 932 advancing and 98 remaining unchanged on the BSE. As many as 346 securities hit the lower circuit and 222 the upper circuit; 149 hit their 52-week high while 39 touched a 52-week low.
Naveen Kulkarni, Chief Investment Officer, Axis Securities said, “US inflation has hit a multi-decade high of 7.5 per cent, which has implications on the pace of interest rate increase by the US Fed. As we suggested earlier, this will lead to higher volatility in all financial markets, including equity, debt, and currency. We expect emerging market currencies to be under pressure, including INR.”
“We also expect Indian interest rates to increase despite dovish RBI yesterday. This will have implications for equity investors. We expect this increased volatility to hit small / midcaps more than large caps,” said Kulkarni.
Vinod Nair, Head of Research at Geojit Financial Services said, “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.”
“US inflation surged 7.5 per cent on an annual basis with the consumer price index for all items rising 0.6 per cent in January. On the domestic front, all sectors were deep in red with IT, realty and PSU banks being the most affected.”
IOC, IndusInd Bank, Tata Steel, NTPC and BPCl were the top gainers on the Nifty 50 while Grasim, Tech Mahindra, Infosys, UPL and HCL Tech were the top losers.
All in red
On the sectoral front, all indices closed in the red with IT, PSU Bank, consumer durables and realty. witnessing increased pressure.
Nifty IT closed 2.72 per cent lower. Nifty PSU Bank and Nifty Consumer Durables were down over 2 per cent each.
Nifty Realty was down nearly 2 per cent. Nifty Bank, Nifty Financial Services, Nifty Private Bank, Nifty Auto and Nifty Healthcare Index were down over 1 per cent each.
Broader indices
The broader market also witnessed increased pressure with broader indices closing in the red.
Nifty Midcap 50 was down 2.27 per cent while Nifty Smallcap 50 was down 2.34 per cent. The S&P BSE Midcap was down 1.84 per cent while the S&P BSE Smallcap was down 1.90 per cent.
The volatility index rose 5.47 per cent to 18.68.
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