Informist, Friday, Dec 16, 2022
By Vaibhavi
NEW DELHI – Domestic benchmark indices ended lower today, mirroring their global peers, due to fears of a recession in the US.
A steeper-than-expected fall in retail sales heightened concerns that the Federal Reserve’s aggressive rate hikes may push the economy into a recession.
According to data from the US Commerce Department, retail sales fell 0.6% in November. The fall was sharper than a decline of 0.3% forecast by Dow Jones.
The fall in US retail sales has come at a time when investors were already weighed down by the Fed’s plan to hold interest rates higher throughout 2023.
The Fed’s terminal funds rate is expected to peak around 5.1%, a level higher than the previous forecast of below 5%.
Bank of England and the European Central Bank also sounded hawkish in their monetary policy reviews on Thursday. ECB President Christine Lagarde said rate hikes were far from over. “If you compare with the Fed, we have more ground to cover… We’re not slowing down, we’re in for the long game,” she said.
This pushed investors further on the edge and prompted them to shun risky assets like equities in favour of safe havens like US bonds. Yields on US bonds recouped some losses today, having fallen for the past three sessions, as investors ran for shelter, pushing prices higher.
Today, the Nifty 50 and the Sensex closed at 18269 points and 61337.81 points, both down 0.8%.
“Given that Indian benchmark indices had scaled fresh record highs in the recent past, investors are now taking the time to book some profits which is primarily a result of the discouraging comments from the Federal Reserve,” said Rajesh Palviya, head-technical and derivatives at Axis Securities.
Palviya believes that lack of support from major sectors was also a big contributor to today’s fall.
Declines outnumbered gainers as more than one stock fell for each one that rose. The sectors that pushed the indices lower were financials, automobiles, pharmaceuticals and information technology.
Public sector banks, a recent favourite of the market, also fell prey to profit booking, following the sharp gains in recent months. The Nifty PSU Bank index was the worst hit among sector indices. The index fell nearly 3%. The index had hit an over 11-year high on Wednesday.
Oil refining companies also gave up their initial gains and ended lower. Index heavyweight Reliance Industries, Oil India, Oil and Natural Gas Corp, and Hindustan Oil Exploration Co had risen 1-2% early in the day after the government cut windfall tax on crude and diesel significantly.
Investors also exited IT stocks as concerns of a recession in the US clouded their growth prospects. Domestic IT companies rely on big corporates for order wins and revenue stream, and a recession in the US may prompt the big corporates to cut down on their IT spending.
Dr Reddy’s Laboratories were the worst hit among Nifty 50 stocks due to an overall weakness in pharmaceutical stocks and an announcement by the company that it was abandoning an anti-psoriasis drug candidate.
Selling was much more severe in the mid-cap space. All mid-cap indices on the National Stock Exchange fell 1.4-1.7% and small-cap indices were down 0.3-0.8%.
Marking a shift, sugar stocks surged in an otherwise weak market on news reports that the government might consider raising the export quota for rest of the marketing year after assessing the domestic production in January.
* Among Nifty 50 stocks, 5 rose and 45 fell
* Among Sensex stocks, 4 rose and 26 fell
* On the BSE, 1,414 stocks rose, 2,120 fell, and 128 were unchanged
* Nifty Auto: Down 1.1%; Nifty Realty: Down 1.5%; Nifty FMCG: Down 0.5%
BSE National Stock Exchange
Sensex: 61337.81, down 461.22 pts (0.8%) Nifty 50: 18269, down 145.90 pts (0.8%)
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)
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)
End
Edited by Ashish Shirke
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