Indian equity markets wiped off the day’s gains to turn negative on Thursday as US futures slipped into the red after the US Fed delivered a 75 bps rate hike overnight. In late-morning trade, the BSE Sensex was down 100 points to 52,423, while the NSE Nifty skid below 15,650, with a loss of 50 points.
Top Gainer & Losers
Among the Sensex-30 shares, Reliance, Bajaj twins, ICICI Bank, IndusInd Bank, Maruti, SBI, Titan and Axis Bank led gains, rising up to 2 per cent. Nestle, Dr Reddy’s, HUL and Bharti Airtel, meanwhile, were the handful of losers.
Broader Markets
In the broader markets, the BSE MidCap and SmallCap indices were also in the positive territory, up to 1 per cent higher. Sectorally, all indices sat in green with notable gains. Nifty financials, PSBs, banks, auto realty, consumer durables and oil & gas pockets led gains, up around a per cent each.
Among stocks, GE Power India gained over 2 per cent after the company’s arm GE Energy Financial Services acquired a 49 per cent stake in Continuum Green Energy’s 148.5 megawatt Morjar onshore wind project in Gujarat for an undisclosed sum.
Mahindra Lifespaces also rose 2 per cent after the company’s wholly owned subsidiary, Mahindra Bloomdale Developers launched its second residential project ‘Mahindra Nestalgia’ in Pune.
Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “Along with the highest rate hike in 28 years, the Fed chief delivered the clear message that “we have the tools and resolve to achieve price stability”. Also, the Fed is significantly reducing the size of its balance sheet. This has negative implications for equity markets globally. Any relief rally is unlikely to last long. In India, the sustained FPI selling is an additional headwind. Investors may follow a cautious investment strategy without taking aggressive bets. Take a long-term view and use dips in the market to slowly accumulate fairly priced high-quality stocks such as leading banks, leading IT, pharma, and select autos. Increase the cash component in the portfolio to exploit any probable sudden changes in outlook and market trend.”
Global Cues
Asian stocks rose on Thursday, while longer-dated U.S. government bond yields fell and the dollar was down from two-decade highs after the U.S. Federal Reserve delivered an aggressive rate hike and cut its growth projections.
Tokyo stocks opened higher Thursday, as investors cheered the US rate hike that boosted Wall Street shares. The benchmark Nikkei 225 index rose 1.88 per cent, or 493.81 points, at 26,819.97 in early trade, while the broader Topix index surged 1.43 per cent, or 26.57 points, at 1,882.50.
The S&P 500 rallied on Wednesday to snap a five-session losing skid after a policy announcement by the Federal Reserve that raised interest rates to market expectations as the central bank seeks to fight rising inflation without sparking a recession. The Dow Jones Industrial Average rose 303.7 points, or 1 per cent, to 30,668.53, the S&P 500 gained 54.51 points, or 1.46 per cent, to 3,789.99 and the Nasdaq Composite added 270.81 points, or 2.5 per cent, to 11,099.16.
Globally, investors will track the Bank of England’s interest rate decision, US jobless claims data, as well as Chinese industrial production data on Thursday, June 16.
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