Domestic equity markets settled sharply lower on Monday amid the fears of global rate hikes following strong US jobs data. Selling in index heavyweights like IT and banking dragged the indices sharply lower during the session. Adani Group stocks continued to remain in the focus.
Traders will keenly await the cues from the US Federal Reserve Chairman Jerome Powell's speech scheduled on Tuesday. Along with this, RBI's monetary policy meeting outcome would also remain on investors' radar.
For the day, the 30-share pack BSE Sensex plunged 334.95 points, or 0.55 per cent, to 60,506.90, whereas Nifty50 Index settled at 17,764.60, falling 89.45 points, or 0.5 per cent. However, broader markets outperformed as BSE midcap and smallcap indices settled in higher, rising over half a per cent each. India VIX spiked over 2 per cent to 14.68-level.
While the sentiment has been sluggish over the past week or so, today's fall can be attributed to weak Asian cues and a cautious approach from the investors ahead of the RBI's credit policy. Selling seemed to have been triggered by further strengthening of the dollar against rupee, leading to weakness in metal, power & select banking stocks, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
"Markets may continue to witness bouts of intra-day volatility due to lack of any fresh positive triggers in the global arena. On daily charts, the index has formed a small inside-body bearish candle which is indicating the continuation of a non-directional activity in the near future. For Nifty, 17700 would be the key support level and below the same, the index could slip till 17600-17520," he said.
On a sectoral front, Nifty metal index disappointed the most, falling more than 2 per cent, whereas IT and financial services indices fell about a per cent each. Among the gainers, Nifty FCMG, media and realty indices posted some healthy gains.
Divis Labs tanked 4 per cent, most among the Nifty50 constituents, whereas JSW Steel, Hindalco and Tata Steel were down 3 per cent each. Infosys, Adani Enterprises and Kotak Mahindra Bank and Either Motors declined 2 per cent each.
Among the gainers, Adani Group's Adani Ports soared 9 per cent during the day, scripting a recovery of 15 per cent from the day's low. IndusInd Bank and Bharat Petroleum were up over 2 per cent each, followed by Apollo Hopsitals, Hero MotoCorp and Bajaj Finance.
Some Adani Group stocks continued to hit lower circuit levels. Adani Transmission tumbled another 10 per cent, whereas Adani Green Energy, Adani Power, Adani Total Gas and Adani Wilmar shed 5 per cent each. NDTV, ACC and Ambuja Cements added up to 2 per cent each.
A strong job market in the United States pushed the global market lower on rate hike fears, as it offers the Fed more leeway in enacting stricter policy measures, said Vinod Nair, Head of Research at Geojit Financial Services.
"This was in contrast to the recent rally in the global indices on the expectation that the economy is in its last phase of policy tightening. RBI’s policy announcement on Wednesday will provide more color on its future rate actions, which is expected to hike the rate by 25 bps," he said.
A total of 3,793 stocks traded for the day on BSE, of which 1,900 settled higher, while 1,696 settled lower. The remaining 197 stocks ended unchanged. A total of 266 stocks hit an upper circuit on BSE, whereas 265 stocks hit the lower circuit during the trading session.
Vodafone Idea surged 20 per cent after the government cleared the conversion of interest worth Rs 16,133 crore on statutory debt into equity. D-Link India surged 18 per cent, whereas Indus Towers, Veranda Learning and Procter & Gamble Health jumped 14 per cent each.
On the Contrary, Nahar Polyfilms tanked 10 per cent, whereas Nahar Spinning and Nahar Capital were down up to 8 per cent each. Visaka Industries, Skipper, Swan Energy, Privi Specialty Chemicals tumbled 7 per each during the trading session.
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