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Bears kept a hold on the market on Friday with benchmark indices trading over 1 per cent lower during the afternoon.
Market opened on a weak note, tracking negative global cues amid a sell-off in the US market and slipped further during the early trade.
Investor sentiments were negatively impacted as the inflation rose to 40-year high in 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, indices were trading lower during the afternoon, witnessing selling pressure across multiple counters.
At 1 p.m., the BSE Sensex was trading at 58,217.56, down 708.47 points or 1.20 per cent. It recorded an intraday high of 58,447.15 and a low of 57,914.10.
The Nifty 50 was trading at 17,390.20, down 215.65 points or 1.22 per cent. It recorded an intraday high of 17,454.75 and a low of 17,303.00.
IOC, IndusInd Bank, Tata Steel, NTPC and BPCL were the top gainers on the Nifty 50 while Grasim, Infosys, Tech Mahindra, Nestle India and Britannia were the top laggards.
Santosh Meena, Head of Research, Swastika Investmart Ltd said, “We are seeing a sharp cut in the market on the back of a sharp jump in US bond yields due to 4 decade-high inflation. However most of this fear is already factored in therefore we have to check how the market will negotiate a high-interest environment because we have seen the scenario of rising interest rates and rising equity markets.”
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,” Kulkarni added.
IT, consumer durables under pressure
On the sectoral front, all indices except Nifty Media were in the red with IT and consumer durables witnessing increased pressure. Nifty IT was down 2.36 per cent while Nifty Consumer Durables was down 1.87 per cent.
Nifty Financial Services, Nifty Realty and Nifty Healthcare Index were down over 1 per cent each.
Broader indices
The broader market also witnessed pressure with indices trading in the red. Nifty Midcap 50 was down 1.46 per cent while Nifty Smallcap 50 was down 1.27 per cent. The S&P BSE Midcap was down 1.21 per cent while the S&P BSE Smallcap was down 1.14 per cent. The volatility index rose 5.49 per cent to 18.68.
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