Informist, Tuesday, Jan 18, 2022
By Joe Milton
MUMBAI – Weakness across Asian and European markets amid a spike in the yield on the benchmark 10-year US Treasury note triggered profit booking in domestic equities.
The 10-year US bond yield hit a two-year high of 1.83% as traders look forward to interest rate hikes by the US Federal Reserve to tame inflation.
The first policy meeting of the US central bank in 2022 is scheduled for Jan 25-26. Investors expect the Fed to hike interest rate more than three times this year.
Major Asian indices such as the Hang Seng, Nikkei 225, and Kospi ended 0.3-1% lower. Key European markets opened 1% lower, while futures of major US indices were down 1-2%.
High interest rates will lead to higher discount of future cash flows of the companies, which will hurt their current valuation.
Following selling pressure in key global markets, the Nifty 50 fell sharply and touched the day’s low of 18085.90 points.
“The weakness can be attributed to selling in the global markets after US 10-year bond yield moved above the 1.80% during the day,” said Parth Nyati, founder of trading platform Tradingo.
Foreign institutional investors net sold Indian equities worth about 50 bln rupees in the last four sessions. Considering the sharp sell-off in the later half of the session, Nyati believes that today would be yet another day of selling by FIIs.
The 50-stock index closed 1.1% lower at 18113.05 points. The BSE Sensex ended at 60754.86 points, down 0.9%, after touching an intraday low of 60662.57 points.
Going forward, Nifty 50 needs to hold above the psychological level of 18000 to maintain the bullish stance, said Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services.
Shares of information technology companies, which are traded at expensive valuation, fell sharply today. All the constituents of the Nifty IT index ended lower with Coforge, Mindtree, Tech Mahindra, and Larsen & Toubro Infotech down 3-4%.
Other sectoral indices that were hit badly were Nifty Auto, Nifty Metal, and Nifty Realty, which fell 2-3%.
The Nifty Bank which was in the green for most of the session but erased the day’s gain in last hour and closed flat at 38210.30 points. Analysts expect the index to find immediate support at 38000 points.
Shares of frontline banks such as HDFC Bank, Axis Bank, and ICICI Bank were resilient and closed 0.5-2% higher.
The sell-off was more intense in the broader market with all the small-cap and mid-cap indices on the NSE ending about 2% lower. The overall market breadth was negative with three stocks falling for each gain in NSE.
On specific stocks, those of Birla Tyres surged 10% after Informist reported that the company was open to selling its radial tyre plant if it could not find a strategic partner.
The company earlier decided to demerge its passenger car radial tyre plant into a new company in a plan to reduce its debt.
* Among Nifty 50 stocks, 8 rose, 42 fell
* Among Sensex stocks, 7 rose and 23 fell
* On the NSE, 484 stocks rose, 1,573 fell and 43 were unchanged
* On the BSE, 1,145 stocks rose, 2,285 fell and 83 were unchanged
* Nifty Energy: Down 0.51%; Nifty Pharma: Down 1.19%; Nifty FMCG: Down 1.28%
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BSE National Stock Exchange
Sensex: 60754.86, down 554.05 pts (0.90%) Nifty 50: 18113.05, down 195.05 pts (1.07%)
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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: 59183.22 (Jan 3) : 2022 Closing Low: 17625.70 (Jan 3)
2022 High (intraday): 61385.48 (Jan 17) : 2022 High (intraday): 18321.55 (Jan 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)
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End
Edited by Aditya Sakorkar
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