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Thursday, December 1, 2022

India Stocks Review: Fall on fear of aggressive Fed rate hikes

Informist, Friday, Apr 22, 2022

 

By Vaibhavi

 

MUMBAI – The benchmark share indices snapped two-day gains and ended down today, in line with the weakness across global markets on rising fears of a steeper rate hike by the US Federal Reserve.

 

The Nifty 50 index fell below its support level of 17200 points due to selling in frontline sectors. The index was down throughout the day due to weakness in the shares of banks and financial services and information technology companies that have substantial weightage in the index.

 

The Nifty 50 and the Sensex ended the week down nearly 2% each.

 

On Thursday, US Federal Reserve Chairman Jerome Powell said that a 50-basis point interest rate hike was “on the table” at the next Federal Open Market Committee meeting in May. Powell also said that it would be appropriate to speed up the Fed’s rate hike trajectory.

 

This today triggered a spike in the yield on the 10-year US Treasury bill to 2.96%, up from an intraday low of 2.83% on Thursday. The sharp jump in US Treasury notes led investors away from other asset classes such as equities and emerging markets.

 

The fear among market participants led to an over 5% jump in the India VIX to a high of 18.76 points. The fear-gauge closed 2.8% higher at 18.35 points.

 

The currency market also felt the heat as the Indian rupee weakened further against the US dollar. The rupee closed at 76.4825 per dollar against 76.1450 on Thursday.

 

The excessive volatility in the market without any clear direction is being influenced on a daily basis by the erratic movement in the US market and the seesaw tussle between foreign institutional investors and domestic institutional investors, said V.K Vijaykumar, head of research, Geojit Financial Services.

 

However, Vijaykumar believes the volatility will be temporary as the market has already discounted the rate hikes by the Fed.

 

The Nifty 50 ended 1.3% lower at 17171.95 points after falling to a low of 17149.20 points. The Sensex closed 1.2% lower at 57197.15 points after hitting a low of 57134.72 points earlier in the day.

 

Index heavyweight Reliance Industries fell prey to profit booking and slipped 1% after testing a record high on Thursday. This also contributed to the Nifty 50’s fall.

 

Selling pressure in all the large cap banks also weighed on the Nifty Bank index, pulling it down 2.1%.

 

Metal stocks also fell, with aluminium companies taking a hit after global major Alcoa cut its demand growth forecast to 2% from 2-3% earlier for 2022. Hindalco Industries, National Aluminium Co, and Vedanta slumped 2-5%.

 

The broader market fared better than the headline indices with all small and mid-cap indices on the National Stock Exchange down 0.3-1%.

 

On the earnings front, HCL Technologies gained over 3% intraday on the company’s strong revenue growth guidance for 2022-23 (Apr-Mar).

 

ICICI Lombard General Insurance Co slumped 6% as flat net-earned premium and widening underwriting losses dented the company’s Jan-Mar earnings. Rallis India plunged 10% on weak quarterly earnings.

 

On the other hand, Cyient surged 9% on strong growth in the company’s Jan-Mar bottomline.

 

* Among Nifty 50 stocks, 8 rose and 42 fell

* Among Sensex stocks, 6 rose and 24 fell

* On the NSE, 797 stocks rose, 1,274 fell and 55 were unchanged

* On the BSE, 1,470 stocks rose, 1,939 fell and 122 were unchanged

* Nifty Metal: Down 2%; Nifty Bank: Down 2.1%; Nifty Pharma: Down 1.8%

BSE                                              National Stock Exchange
Sensex: 57197.15 points, down 714.53 pts (1.2%)  Nifty 50: 17171.95 points, down 220.65 pts (1.3%) 

S&P BSE Sensitive Index                           Nifty 50
Lifetime High: 62245.43 (Oct 19)                : Lifetime High: 18604.45 (Oct 19)
Record Close High: 61765.59 (Oct 18)            : Record Close High: 18477.05 (Oct 18)

2022 1st day close: 59183.22 (Jan 3)            : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 61308.91 (Jan 17)            : 2022 Closing High: 18308.10 (Jan 17) 
2022 Closing Low: 52842.75 (Mar 7)              : 2022 Closing Low: 15863.15 (Mar 7)
2022 High (intraday): 61385.48 (Jan 17)         : 2022 High (intraday): 18321.55 (Jan 17)

2022 Low (intraday): 52260.82 (Mar 8)           : 2022 Low (intraday): 15671.45 (Mar 8)
2021 Closing High: 61305.95 (Oct 14)            : 2021 Closing High: 18338.55 (Oct 14) 
2021 Closing Low: 46285.77 (Jan 29)             : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 61353.25 (Oct 14)         : 2021 High (intraday): 18350.75 (Oct 14)
2021 Low (intraday): 46160.46 (Jan 29)          : 2021 Low (intraday): 13596.75 (Jan 29)

2020 Closing High: 47751.33 (Dec 31)            : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23)             : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31)         : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24)          : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20)         : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19)          : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28))         : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23)           : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26)         : 2017 High(intraday): 10515.10 (Dec 26)

 

End

 

Edited by Ashish Shirke

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Send comments to [email protected]

 

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Source: Cogencis

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