Benchmark indices were trading in deep red during the afternoon on Thursday amid weak global cues.

The market declined following a hawkish stance from the US Fed, tracking weakness in the global markets. Indices slumped further in the first half, witnessing heavy selling across multiple counters. 

At 1 pm, the BSE Sensex was trading at 56,683.12, down 1175.03 points or 2.03 per cent. It recorded an intraday high of 57,317.38 and a low of 56,439.36. The Nifty 50 was trading at 16,928.45, down 349.50 points or 2.02 per cent. It recorded an intraday high of 17,073.15 and a low of 16,866.75.

The volatility index rose 5.86 per cent to 22.61.

Even though the US Federal Reserve kept the rate unchanged, its Chief Jerome Powell gave enough indication of a rate hike from March as part of its fight to check inflation, leading to a fall in the global markets. Further, the settlement of F&O monthly contracts on the National Stock Exchange today has added to the volatility, as per experts. 

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “Markets are down mainly on the Hawkish Fed Outlook. Mr Powell, chairman of the Federal Reserve, signaled a rise in interest rates in March and predicted the possibility of an unexpectedly aggressive policy tightening.”

“This has led to an increase in the 10-year bond yields of the US and the dollar index, which is negative for emerging markets. Tensions between Russia and Ukraine have pushed up crude oil prices. With all these headwinds, the market today is facing a monthly expiration date for January F&O contracts, which has added to the volatility,” said Chouhan.

According to Parth Nyati, Founder, Tradingo, with markets being very volatile amid hawkish US Fed and rising geopolitical tension, Indian markets are also facing the same pressure due to heavy FIIs’ selling. 

“If we look at the Indian markets then there are lots of positive triggers that may help our market to outperform but we just need some calmness in global markets,” said Nyati.

Cipla, State Bank of India, Axis Bank, IOC and ONGC were the top gainers on the Nifty 50, while Tech Mahindra, HCL Tech, Eicher Motor, Wipro and Titan were the top laggards. 

PSU Bank in focus

On the sectoral front, all indices except Nifty PSU Bank and Nifty Media were in the red. IT, realty and consumer durables witnessed the highest losses.

Nifty PSU Bank was up nearly 3 per cent. 

Meanwhile, Nifty IT was down over 4 per cent. Nifty Realty and Nifty Consumer Durables were trading over 3 per cent lower. Nifty Pharma was down over 2 per cent while Nifty Healthcare Index was down 2.6 per cent. 

Nifty Metal was trading nearly 2 per cent lower. 

Broader indices

Midcaps and smallcaps also witnessed selling pressure, with broader indices trading red.

Nifty Midcap 50 was down 2.06 per cent while Nifty Smallcap 50 was down 1.59 per cent. The S&P BSE Midcap was down 2.31 per cent, while the S&P BSE Smallcap was down 1.43 per cent.

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