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Benchmark indices closed nearly 2 per cent lower amid volatility on Friday.
The market opened on a negative note, tracking weak global cues. Indices extended losses through the day amid across the board selling.
The BSE Sensex closed at 54,835.58, down 866.65 points or 1.56 per cent. It recorded an intraday high of 55,070.12 and a low of 54,586.75. The Nifty 50 closed at 16,411.25, down 271.40 points or 1.63 per cent. It recorded an intraday high of 16,484.20 and a low of 16,340.90.
Over 2,500 stocks decline
The market breadth remained negatvie with 2,519 stocks declining on the BSE as against 835 that advanced while 106 remained unchanged. Furthermore, 11 stocks hit the upper circuit compared to the three stocks that were locked in the lower circuit. Besides, 105 stocks touched a 52-week low and 56 touched a 52-week high.
The volatility index rose 4.71 per cent to 21.25.
Inflation concerns and the impact of rate hikes by central banks on the economic growth has been weighing on investor sentiments.
Vineet Bagri, Managing Partner- TrustPlutus Wealth said, “Indian markets are trading weak which are in line with its global peers. Investors are worried that aggressive rate hikes by central banks to check inflation could hurt global growth. RBI has surprised the market with an unscheduled rate hike. The market are fearful that US Fed and other central banks would have to raise interest rates at a faster pace in comparison to what was planned to fight the inflation, which could push large economies into a recession.”
Further, the Bank of England while raising its interest rates, warned about a possible risk of recession, adding to investor concerns.
The rising 10-year bond yields in risk free rate, in turn, impacts equity valuations on the negative, as per Bagri.
“The markets could consolidate in the near term after this correction. All eyes are on the Q4FY22 results,” said Bagri.
Shibani Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company said, “Indian equity markets continued to remain volatile amidst worry on rising interest rates, the Russia-Ukraine war and global commodity inflation. Global yields rose higher as a slew of hawkish remarks from central banks reinforced expectations of tightening.”
“Despite all the macro headwinds, Indian economy continued to show uptick in growth as activity normalisation gathered pace. High frequency indicators are have been improving in the past few months. Market participants would likely be watching out for corporate earnings of Q4FY22 and management commentary on demand and margins for FY23. Duration of Russia-Ukraine war, interest rate hikes by global central banks, supply chain disruptions and commodity inflation would be some of the other key factors,” said Kurian.
Hero Motocorp, Tech Mahindra, Powergrid, ITC and ONGC were th top gainers on the Nifty 50 while Bajaj Finance, Divi’s Lab, Shree Cement, UPL and Axis Bank were the top losers.
All in red
All sectoral indices closed in the red.
Nifty Realty was down 3.56 per cent at closing. Nifty Financial Services, Nifty Private Bank, Nifty IT, Nifty Metal and Nifty Consumer Durables each closed over 2 per cent lower. Nifty Bank and Nifty Auto were each down nearly 2 per cent.
Broader indices
Broader market witnessed increased pressure.
Nifty Midcap 50 was down 1.88 per cent while Nifty Smallcap 50 was down 2.40 per cent. The S&P BSE Midcap was down 2.06 per cent while te S&P BSE Smallcap was down 2.10 per cent.
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