Comments
Benchmark indices closed 1 per cent lower on Thursday amid weak global cues.
The market opened on a negative note following a hawkish stance from the US Fed, tracking weakness in the global markets and slumped further during the day. Indices managed to recover marginally during closing hours, led by bank and auto stocks, however, closed lower, dragged by IT, pharma and consumer durables.
The BSE Sensex closed at 57,276.94, down 581.21 points or 1.00 per cent. It recorded an intraday high of 57,508.61 and a low of 56,439.36. The Nifty 50 closed at 17,110.15, down 167.80 points or 0.97 per cent. It recorded an intraday high of 17,182.50 and a low of 16,866.75.
Breadth favours decliners
The breadth of the market was in favour of the decliners with 1,884 stocks declining on the BSE as against 1,480 that advanced while 91 remained unchanged. Furthermore, 389 stocks hit the lower circuit as compared to the 313 stocks that were locked in the upper circuit. Besides, 156 stocks touched a 52-week high level and 28 touched a 52-week low
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. The market has also been under pressure due to heavy FIIs’ selling.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd said, “Markets are down mainly on the Hawkish Fed Outlook. 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 Sameer Kaul – MD & CEO, TrustPlutus Wealth, the fall in the Indian markets is in line with global markets.
“The markets were eagerly awaiting the outcome of the US Federal Reserve meeting. The Federal Reserve has indicated that they will begin hiking interest rates in the near future and that there will be multiple rate hikes this year. Along with that, the Fed has also stated that they will end the asset purchase program in March and will also look to reduce the size of the Fed Balance Sheet from sometime later this year. The combination of these measures is what has spooked markets globally as it would mean moving from a scenario of easy and excess liquidity to a scenario of liquidity tightening. We expect 2022 to be a much more challenging year from a returns perspective as compared to 2021,” said Kaul.
Axis Bank, State Bank of India, Cipla, Maruti and Kotak Bank were the top gainers on the Nifty 50 while HCL Tech, Tech Mahindra, Dr Reddy, TCS and Wipro were the top losers.
Banks, auto in focus
On the sectoral front, while banks, especially PSU bank and auto gained focus, IT, pharma, consumer durables and realty dragged.
Nifty PSU Bank recorded the highest gains and closed over 5 per cent higher. Nifty Bank and Nifty Private Bank were up 0.73 per cent and 0.51 per cent, respectively. Nifty Auto was up 0.34 per cent.
Meanwhile, Nifty IT was down 3.55 per cent. Nifty Pharma and Nifty Healthcare Index were down 1.87 per cent and 2.25 per cent, respectively. Nifty Realty was down 1.81 per cent. Nifty Consumer Durables and Nifty FMCG closed 2.28 per cent and 1.14 per cent lower, respectively.
Broader indices
Midcaps and smallcaps also witnessed selling pressure with broader indices closing in the red.
Nifty Midcap 50 was down 0.84 per cent while Nifty Smallcap 50 was down 0.99 per cent. The S&P BSE Midcap was down 1.25 per cent while the S&P BSE Smallcap was down 0.82 per cent.
The volatility index softened 1.36 per cent at closing to 21.07.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.