Informist, Thursday, May 12, 2022
By Ankika Biswas
MUMBAI – Domestic equities witnessed a bloodbath today as a tainted global macroeconomic picture and concerns over mounting inflation marred investors’ appetite for the risky asset class. Falling for the fifth straight session, the headline indices were in a free fall today, slumping nearly 3% intraday.
With today’s sharp slide, the indices have lost over 5% in five straight sessions, reflecting bears have a control over the market. Today, the Nifty 50 closed at a nine-month low, while the Sensex settled at two-month low.
A higher-than-expected US inflation print for April reignited concerns of the Federal Reserve resorting to steeper rate hikes, which may result in an economic growth slowdown. This triggered a sell-off across global equities.
“High inflation prints during tightening liquidity periods is resulting in exaggerated moves in both equities and fixed income,” said Jyoti Prakash, managing partner – Equity & PMS at PRP Professional Edge Associates.
Further, Britain’s economy contracted 0.1% in March as consumers cut back on spending in the backdrop of increasing cost of living.
Investors also exercised some caution ahead of the domestic CPI data for April, to be released later today. The inflation reading is expected to touch an 18-month high of 7.5%, which may make for a compelling case for another rate hike by the Indian central bank in its upcoming meeting.
Risk aversion among investors also saw the “fear-gauge” India VIX jump over 11% intraday and hit an over-one-month high of 25.31 points.
Today, the Nifty 50 and Sensex closed over 2% lower at 15808 points and 52930.31 points, respectively. Earlier, the indices tested lows of 15735.75 points and 52702.30 points.
“The mix of earnings downgrades along with a reversal of the interest rate cycle is increasing volatility in the markets, said Sushant Bhansali, chief executive officer at Ambit Asset Management, “We believe that we are in the consolidation phase after the big bull run in the last two years, a much-needed breather.”
Not only equities, but the rupee also took a sharp toll, falling to an all-time low against the greenback today as the dollar index rose to a two-decade high.
“It is rare to see the US dollar as the only safe haven,” said Prakash of PRP Professional Edge Associates. “Normally when equities aren’t doing well, some other asset class would be giving positive returns, but not this time.”
The sell-off in the market was broad-based today, with banks, metals, financial services and automobile packs at the forefront. In fact, weighed down by all of its constituents, the Nifty Bank index closed over 3.3% lower at 33532.15 points.
Even the mid- and small-cap indices on the NSE closed 2% lower today.
Among stock-specific action, Hindalco Industries slumped nearly 7% intraday, as the company’s US arm Novelis Inc’s operational performance was affected by disruptions in production and supply chain.
Tata Motors, too, slumped over 4% in a weak market as investors exercised some caution ahead of the company’s Jan-Mar earnings, due later in the day. Analysts believe that the sub-par performance of Jaguar Land Rover may weigh on the company’s earnings.
In fact, barring Wipro, all the Nifty 50 stocks closed in the red today.
* Among Nifty 50 stocks, 1 rose, and 49 fell
* Among Sensex stocks, 1 rose, and 29 fell
* On the NSE, 447 stocks rose, 1,676 fell and 31 were unchanged
* On the BSE, 747 stocks rose, 2614 fell and 86 were unchanged
* Nifty Auto: down 2.05%; Nifty Bank: down 3.35%; Nifty Metal: down 3.30%
BSE National Stock Exchange
Sensex: 52930.31 points, down 1158.08 pts (2.1%) Nifty 50: 15808 points, down 359.10 pts (2.2%)
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: 15808 (May 12)
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)
Edited by Deepshikha Bhardwaj
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