Informist, Tuesday, Jan 10, 2023
By Padmini Dhruvaraj
MUMBAI – Domestic equities closed in the red after fears of prolonged rate hikes by the US Federal Reserve reemerged ahead of Fed Chairman Jerome Powell’s speech in Stockholm later today. A fall in the stocks from sectors such as financial services and information technology further accentuated the losses in the indices.
Investors made a U-turn from risky assets globally after some Fed officials signalled that the central bank will rise interest rates above 5% this year before pausing. The US CPI data for December, due Thursday, will be among the last such readings that the policymakers will see before their February meeting. Last week, the US jobs data showed that wage growth has decelerated.
Domestic indices erased most of Monday’s gains as investors booked some profit. Both the Nifty 50 and the 30-stock Sensex closed 1% lower at 17914.15 points and 60115.48 points, respectively. The “fear-gauge” India VIX also rose nearly 9% today as risk aversion in the market intensified.
Prashanth Tapse, senior vice president of research at Mehta Equities, said, “Markets witnessed fresh drubbing ahead of Federal Reserve Chairman Jerome Powell’s speech, and Nifty slipped hard from 18100 levels as investors weighed hawkish comments from two US Federal Reserve policymakers that countered hopes that the US central bank might dial back its aggressive monetary tightening.”
Benchmark indices have been under pressure since China said it would end its stringent zero-COVID policy. Chinese equities were one of the worst performers in 2022, thus making their valuations much cheaper than the Indian markets. Now with their economy inching towards “normality”, investors see it as an opportunity to make a profit by buying stocks at lower valuations, said analysts.
Foreign institutional investors have been net sellers in the Indian cash market for the last 12 sessions. “Some part of the FII funds will surely flow into the Chinese economy,” said Asutosh Mishra, head of research at Ashika Borking. “However, the direction of fund flows will be the same. If FIIs invest in China they will also invest in India, just a slightly different proportion.” Indian equities also have strong support from domestic and retail investors, he added.
Analysts said the lack of strong domestic triggers is also a reason why the indices are dancing to the beats of global markets. “Local investors have been following global cues, and weakness in European and US markets triggered a downfall in domestic equities,” said Shrikant Chouhan, head of equity research at Kotak Securities. “Trading sentiment has been very weak and most of the sluggish external factors are prompting investors to book profit at regular intervals.”
Strong selling across information technology and banking counters dragged the Nifty 50 below its psychologically-important level of 18000 points. Shares of information technology companies fell today as a subdued set of earnings from industry major Tata Consultancy Services sparked fears of a similar show by its peers. The Nifty IT closed 0.9% lower, as index heavyweights–Infosys, TCS, and Tech Mahindra, fell 1-1.3%.
Stocks of financial services companies also fell, in line with the overall subdued trend in the market. The Nifty Bank index closed 1.3% lower, while the Nifty PSU Bank ended 2.7% down. HDFC Bank and State Bank of India lost about 2% each and were among the worst-hit stocks in the Nifty 50.
Shares of metal companies traded on a mixed note after outperforming on Monday as Citibank upgraded its rating for the sector from “underweight” to “neutral”. The brokerage believes the economic reopening in China will potentially lead to pricing as well as demand recovery for the metals sector. While gains of 1-3% in Tata Steel, Hindalco Industries, Hindustan Zinc, and Hindustan Copper supported the Nifty Metal index, a 5.4% slump in Adani Enterprises dragged the index. Shares of Adani Enterprises fell on news reports that the company is planning to launch its follow-on-public offer later this month.
Among stocks, Bharti Airtel fell over 3% today as investors saw the telecom company’s spending rising after it purchased spectrum worth $316.7 mln in Nigeria’s auction of five-generation services. Shares of Tata Motors closed 6% higher after its subsidiary, Jaguar Land Rover, on Monday reported a 15% year-on-year rise in wholesale volumes during Oct-Dec.
Indian stocks are gradually drifting lower amid volatility and indications are pointing towards more pain ahead, said analysts. “Technically, the Nifty has formed a long bearish candle on daily charts indicating further weakness from the current levels,” said Chouhan.
He said level of 18000 points would be the key level to watch out for bulls, and above the same the index could retest the level of 18100-18150. On the flip side, the 17800 level would act as a sacrosanct support zone, below which selling pressure is likely to accelerate and drag down the index up to 17700-17675 points, he added.
* Among Nifty 50 stocks, 15 rose and 35 fell
* Among Sensex stocks, 8 rose and 22 fell
* On the BSE, 1,329 stocks rose, 2,189 fell, and 136 were unchanged
* On the NSE, 792 stocks rose, 1,441 fell, and 473 were unchanged
* Nifty PSU Bank: Down 2.67%; Nifty Bank: Down 1.33%; Nifty Auto: Down 0.28%
BSE National Stock Exchange
Sensex: 60115.48, down 631.83 pts (1%) Nifty 50: 17914.15, down 187.05 pts (1%)
S&P BSE Sensitive Index Nifty 50
Lifetime High: 63583.07 (Dec 1, 2022) : Lifetime High: 18887.60 (Dec 1, 2022)
Record Close High: 63284.19 (Dec 1, 2022) : Record Close High: 18812.50 (Dec 1, 2022)
2023 1st day close: 61167.79 (Jan 2) : 2023 1st day close: 18197.45 (Jan 2)
2023 Closing High: 61167.79 (Jan 2) : 2023 Closing High: 18197.45 (Jan 2)
2023 Closing Low: 59900.37 (Jan 6) : 2023 Closing Low: 17859.45 (Jan 6)
2023 High (intraday): 61222.79 (Jan 2) : 2023 High (intraday): 18215.15 (Jan 2)
2023 Low (intraday): 59669.91 (Jan 6) : 2023 Low (intraday): 17795.55 (Jan 6)
2022 1st day close: 59183.22 (Jan 3) : 2022 1st day close: 17625.70 (Jan 3)
2022 Closing High: 63284.19 (Dec 1) : 2022 Closing High: 18812.50 (Dec 1)
2022 Closing Low: 51360.42 (Jun 17) : 2022 Closing Low: 15293.50 (Jun 17)
2022 High (intraday): 63583.07 (Dec 1) : 2022 High (intraday): 18887.60 (Dec 1)
2022 Low (intraday): 50921.22 (Jun 17) : 2022 Low (intraday): 15183.40 (Jun 17)
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)
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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