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Benchmark indices were trading in the red during the afternoon on Thursday, amid profit-booking.
The market, which opened on a weak note on global cues, recovered slightly in the afternoon session. A slight hawkish stance by the Federal Open Market Committee (FOMC) and inflation concerns weighed on investor sentiments. While US equities ended lower overnight, Asian bourses were trading mixed.
Also read: Nifty Call: Go long on a decisive rally above 15,750 levels with a fixed stop-loss
At 1 pm, the BSE Sensex was at 52,369.62, down 132.36 points or 0.25 per cent. It hit an intraday high of 52,523.88 and a low of 52,099.72. The Nifty 50 was at 15,718.20, down 49.35 points or 0.31 per cent. It hit an intraday high of 15,769.35 and a low of 15,644.70.
Ultratech Cement, Asian Paints, HDFC Life, Tata Consumer and TCS were the top gainers on the Nifty 50, while Adani Ports, Coal India, Hero MotoCorp, Maruti and Hindalco were the top laggards.
FOMC outcome impacts investor sentiments
The US Federal Reserve, while maintaining status quo stance on rates and bond-buying programme, projected an interest rate hike into 2023 while expressing concerns over inflation. It indicated tapering off the bond-buying programme sooner than later.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The FOMC meet has sent out mixed signals. The decision to keep rates unchanged at zero to 0.25 levels, maintain asset purchases at $120 billion a month and declaration that monetary policy will continue to give powerful support to growth are supportive for markets. But Fed’s language is mildly hawkish since there are indications of bringing the rate hikes forward. Fed chief’s remark that “inflation can be more persistent than we thought” is a signal that the Fed will be serious about tackling inflation by withdrawing accommodation at the right time.”
“The rise in US 10-year bond yield by 10 bps to 1.58 per cent and the Dollar index moving up to 91.50 are negatives for emerging markets like India. However, it is important to note that the Fed has raised the 2021 US GDP forecast to 7 per cent from 6.5 per cent earlier. This means higher EPS growth and better prospects for equities. Back home in India, Covid-19 data continues to improve and reopenings are gathering momentum favouring unlock trades. Some correction in the market now is desirable since it would make the market healthy,” added Vijayakumar.
Metals continue to remain under pressure
On the sectoral front, FMCG and IT stocks continued to remain in focus while metals, auto and financials dragged.
Nifty FMCG was up 0.25 per cent, while Nifty IT was up 0.26 per cent.
Meanwhile, Nifty Metal was down 1.44 per cent.
Nifty Bank, Nifty Financial Services and Nifty Auto were down 0.65 per cent each.
Broader indices
As for broader indices, mid-cap stocks underperformed compared to the benchmarks, while small-cap stocks were trading flat.
Nifty Midcap 50 was down 0.47 per cent, while Nifty Smallcap 50 was 0.03 up per cent.
The S&P BSE Midcap was down 0.59 per cent, while the S&P BSE Smallcap was up 0.06 per cent.
The volatility index rose 2.89 per cent at 15.30.
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