Informist, Thursday, Dec 16, 2021
By Abhishek Saini and Ankika Biswas
MUMBAI – Benchmark indices managed to end with marginal gains today, but the choppiness seen during the day highlighted the indecisiveness among investors over taking risky bets, as they prepare for a high interest rate environment amid inflation headwinds.
Clearing the dust on its likely monetary policy trajectory, the US Federal Reserve guided for three interest rate hikes in 2022 and 2023, as inflation in the country has risen at the fastest pace in nearly four decades. This clearly indicates that the central bank’s key focus will be on taming inflation and bringing it within its targeted range.
The Fed has also decided to reduce the monthly pace of its net asset purchases by $30 bln. Previously, the Federal Open Market Committee had committed to taper its asset purchases by $15 bln each, putting it on pace to end the taper in June.
“The scaling back of asset purchases by the Fed coupled with the likelihood of the rise in interest rate would have implication on the flow of funds into Indian markets,” CareEdge Advisory & Research said in its report.
India has already witnessed foreign fund outflows of $4 bln since October, from both debt and equity, partially negating the $5.5 bln of inflows seen during Apr-Sep, when the economy kick-started post the second wave of COVID.
Concerns over capital flows reflected in the market today as Nifty 50 briefly slipped below the 17200-mark during the day. However, it managed to close above that level at 17248.40 points, with 0.2% gains.
The BSE Sensex also ended 0.2% higher at 57901.14 points after oscillating between 57683.11 points and 58337.20 points.
Staring at a higher interest rate environment, investors exited rate-sensitive banks. Shares of ICICI Bank, Axis Bank and IndusInd Bank closed 0.4-1.5% lower. The Nifty Bank index also shed 0.7% to close at 36548.65 points.
The sector that helped indices end in green was information technology, as bets shifted to defensive ones. Infosys’ stock ended over 2% higher and was one of the top gainers on the Nifty 50 index. The Nifty IT index also closed the day 1.2% higher at 36160.30 points.
Among specific stocks, gains in Reliance Industries also aided the headline indices. The scrip had risen nearly 2% intraday, after falling over the past three sessions.
Shares of One97 Communications rebounded today and rose nearly 4% intraday, after falling for the past four sessions, as some traders might have utilised the dips to buy the stock.
Lasa Supergenerics’ shares snapped two days of losses and surged 15% intraday to a one-month high after the company said it has received an order from the Bombay High Court that the closure ordered by the Maharashtra Pollution Control Board shall not be acted on, allowing the company to restart its mother unit situated at Chiplun.
Shares of Zensar Technologies gained over 4% during the day as brokerage Edelweiss Securities initiated coverage on the stock with a target price of 705 rupees, indicating an upside of nearly 50% from current levels, on expectation of strong growth prospects.
Among major laggards, TVS Motor Co closed over 5% lower after enthusiasm about the company’s pact with BMW Motorrad faded as some analysts highlighted competition headwinds for the automaker in the electric scooter segment.
While the large-cap stocks witnessed some buying interest, the broader market remained under the selling pressure, as most mid-cap and small-cap indices on the NSE closed 0.7-1% lower.
* Among Nifty 50 stocks, 28 rose and 22 fell
* Among Sensex stocks, 14 rose and 16 fell
* On the NSE, 758 stocks rose, 1,244 fell and 55 were unchanged
* On the BSE, 1,496 stocks rose, 1,858 fell and 99 were unchanged
* Nifty IT: Up 1.2%; Nifty Bank: Down 0.7%; Nifty Auto: Down 0.7%
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BSE National Stock Exchange
Sensex: 57901.14, up 113.11 pts (0.2%) Nifty 50: 17248.40, up 27 pts (0.2%)
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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)
2021 1st day close: 47868.98 (Jan 1) : 2021 1st day close: 14018.5 (Jan 1)
2021 Closing High: 61765.59 (Oct 18) : 2021 Closing High: 18477.05 (Oct 18)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 62245.43 (Oct 19) : 2021 High (intraday): 18604.45 (Oct 19)
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
US$1 = 76.09 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Shirsha Thakur
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