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Weekly market wrap: Sensex slips 492 points; metal stocks defy gravity

Weekly market wrap: Sensex slips 492 points; metal stocks defy gravity

The 30-share BSE Sensex declined 491.90 points, or 0.84 per cent, to 58,152.92 for the week ended February 11.

Weekly market wrap: Sensex slips 492 points; metal stocks defy gravity Weekly market wrap: Sensex slips 492 points; metal stocks defy gravity

Friday’s selling on Dalal Street dragged the benchmark equity indices lower for the week after the strong US inflation data hints aggressive rate hike by the Federal Reserve. The 30-share BSE Sensex declined 491.90 points, or 0.84 per cent, to 58,152.92 for the week ended February 11. Likewise, the 50-share NSE Nifty index lost 141.55 points, or 0.80 per cent, to 17,374.75.

However, 13 stocks in the Nifty50 index defied gravity. With a gain of 6.64 per cent, Tata Steel emerged as the top gainer in the index. It was followed by Coal India (up 3.80 per cent), Hindalco (up 3.34 per cent), IndusInd Bank (up 2.76 per cent) and NTPC (up 2.20 per cent). On the other hand, HDFC Life Insurance, Tata Consumer Products, Larsen & Toubro, SBI Life Insurance Company, Tata Consultancy Services and HDFC each declined over 3 per cent.

Going ahead, Rahul Shah, co-head of research, Equitymaster said, “I don't think there is going to be any respite from volatility in the near term. Not only are Indian stocks not cheap anymore, but global headwinds like hottest inflation in four decades in the US and Ukraine situation are also further complicating matters for the bulls.”

“It may not be a bad idea to get out of stocks where valuations have run up a great deal and sit on some cash. Since there are strong chances of markets correcting further, the cash can come in handy to scoop up some good quality stocks at attractive valuations later on,” Shah added.

Barring the BSE Metal (up 3.80 per cent) and Auto index (up 0.10 per cent), other sectoral indices on the exchange settled the week in the red. The BSE Capital Goods, Realty, FMCG, IT, Consumer Durables each declined over 2 per cent. The BSE Midcap and Smallcap indices also lost 2.02 per cent and 3.40 per cent in the past five trading sessions.

Meanwhile,  the Reserve Bank of India (RBI) kept the benchmark interest rate unchanged at 4 per cent and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. Besides, RBI retained its growth projection at 9.2 per cent and inflation at 5.3 per cent for the current financial year.

Market participants will zero in on the Wholesale Price Index (WPI) data for March, scheduled to be released on February 14. WPI rate in India inched down to 13.56 per cent in December 2021 from 14.23 per cent in the previous month. Consumer Price Index (CPI) for January will also be released on the same day.

Traders will be reacting to lots of important earnings in the last leg of the result season starting with Adani Enterprises, Alembic, Coal India, Dish TV India, Ircon International, PTC India, RailTel Corporation of India, V2 Retail, Schaeffler India, Ambuja Cements and Nestle India, among others.

Vinod Nair, head of research, Geojit Financial Services said, “The direction of the market in the week ahead will be determined by cues from global markets while domestic macroeconomic data and corporate earnings will continue to remain in focus in the near term.”

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