A surprisingly hawkish tone by the US Federal Reserve — where it guided for two potential rate hikes in 2023 — crushed equities across the globe on Thursday as investors feared global central banks may hike rates sooner than expected.
US Treasury yields gained overnight and the dollar strengthened against the rupee today to its highest level in six weeks, hammering equity prices on Dalal Street. This comes on the day of the weekly F&O expiry, adding to the overall volatility.
What could have further dented the sentiment is a report by Swiss brokerage UBS, which says that the Indian economy is unlikely to see a V-shaped recovery in Q1FY22 as consumer sentiment remains very weak this time and people are more worried about the pandemic than last year.
The frontline S&P BSE Sensex declined 484 points from the day’s high and hit a low of 52,040. It, however, ended at 52,323 levels, down 179 points or 0.34 per cent. On the NSE, the Nifty50 index breached below its immediate support of 15,650 and hit a low of 15,616. It recovered marginally to end at 15,691 levels, down 76 points or 0.48 per cent.
In the broader markets, the BSE MidCap index cracked 1.3 per cent while the BSE SmallCap index slipped 0.58 per cent.
Individually, shares of Gujarat Gas hit a new high of Rs 674.80 after they advanced 6 per cent on the BSE in intra-day trade on Thursday. In the past four weeks, the stock of the integrated oil and gas firm has rallied 32 per cent after it reported a strong set of numbers for the quarter ended March (Q4FY21). In comparison, the S&P BSE Sensex is up 5.6 per cent during the same period.
Furthermore, shares of cement companies surged up to 7 per cent on the BSE in intra-day trade in an otherwise subdued market on expectation of demand recovery in the coming quarters.
Ambuja Cements and JK Lakshmi Cement hit their respective record highs in intra-day trade today while Saurashtra Cement, Andhra Cements, KCP, JK Lakshmi Cement and Gujarat Sidhee Cement gained between 4 per cent and 7 per cent. Besides, Orient Cement, JK Cement, and UltraTech Cement advanced in the range of 2 per cent to 3 per cent.
Shares of breweries and distilleries were also on a roll, with Globus Spirits, Radico Khaitan and Associated Alcohols & Breweries hitting their respective highs. The stocks rallied up to 20 per cent on the BSE in intra-day trade on Thursday, in an otherwise weak market, on the back of strong earnings and expectation of rising demand for premium and high-price alcohol.
United Breweries, United Spirits, Pioneer Distilleries and Som Distilleries & Breweries, meanwhile, gained in the range of 1 per cent to 3 per cent.
Sectorally, the Nifty Metal index slipped 2 per cent, followed by the Nifty Realty index (1.6 per cent) and the Nifty PSB and Auto indices (around 1.5 per cent each). The Nifty FMCG and IT indices, on the other hand, gained 0.14 per cent and 0.57 per cent, respectively.
In the primary market, the Rs 520-crore IPO of Dodla Dairy has been subscribed 3.2 times while that of KIMS was subscribed 54 per cent till about 4:30 PM on the second day of the issue.
Global stock markets were mostly lower Thursday after the Federal Reserve indicated it might ease off economic stimulus earlier than previously thought.
In Asia, the Nikkei 225 in Tokyo lost 0.9 per cent, South Korea’s Kospi and Australia’s S&P-ASX 200 shed 0.4 per cent each. China’s Shanghai Composite Index, on the contrary, rose 0.2 per cent while Hong Kong’s Hang Seng added 0.4 per cent.
In Europe, too, the pan-European STOXX 600 index was down 0.3 per cent, the UK’s FTSE 100 lost 0.3 per cent, and Frankfurt’s DAX was off less than 0.1 per cent. The CAC 40 in Paris also retreated 0.1 per cent.
On Wall Street, futures for the benchmark S&P 500 index and the Dow Jones Industrial Average were down 0.3 per cent.
In the commodities market, Gold and Silver futures tanked 2 per cent each while Brent Crude was up over 1 per cent on MCX.