US Fed hawkish stance: Profit booking pulls down indices further

Renewed Rate Hike Fears

♦ BSE Sensex fell 570.60 pts or 0.85% to 66,230.24

♦ During the day, Sensex plunged 672.13 pts or 1% to 66,128.71

♦ NSE Nifty declined 159.05 pts or 0.80% to 19,742.35

♦ Nifty fell 482 pts or 2.39% in just 3 days

♦ PSU Banks and mid and small-caps were the worst hit

♦ FIIs offloaded equities worth Rs3,110.69 cr

♦ ICICI Bank, M&M, SBI, UltraTech Cement, IndusInd Bank, Kotak Mahindra Bank, Tata Motors, Bajaj Finserv, Axis Bank and Power Grid were major losers

♦ Tech M, Airtel, Infosys, Asian Paints, HUL, L&T and Titan among gainers

Equity benchmark indices Sensex and Nifty buckled under selling pressure for the third straight session to settle nearly one per cent lower on Thursday as investors pared exposure to auto, banking and financial shares amid a sluggish trend in global markets. Global equities fell after the US Federal Reserve signalled that they expect to raise rates once more this year to fight inflation.

The 30-share BSE Sensex fell 570.60 points or 0.85 per cent to settle at 66,230.24. During the day, it plunged 672.13 points or 1 per cent to 66,128.71. The Nifty declined 159.05 points or 0.80 per cent to end at 19,742.35. Market capitalisation (Mcap) on BSE fell by Rs2,61,255.29 crore to Rs3,17,90,603.86 crore (Rs317.91 lakh cr) on Thursday.

Market capitalisation (Mcap) on BSE fell by Rs2,61,255.29 crore to Rs3,17,90,603.86 crore (Rs317.91 lakh cr) on Thursday.

“Domestic market declined following a hawkish stance by the Fed chair and prolonged high-interest rate trajectory, which is not positive for a slowing global economy. PSU Banks and Mid and small-caps were the worst hit due to stretched valuations and concern over moderation in yields. Rising oil prices and erratic rainfall further led investors to stay cautious in the market,” said Vinod Nair, Head of Research at Geojit Financial Services.

“Bearish sentiment across the global equities led to selling in the domestic market for the third straight session as investors fretted over the US Fed statement indicating one more rate hike later this year. Other negative catalysts like lingering overseas fund outflows, rising US Dollar index and treasury yields, and higher crude oil prices are making investors jittery,” Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

“Market fell by 2.2 per cent in the last three days amid profit booking at higher levels. Uncertain global cues and persistent selling by FIIs are likely to keep markets under pressure in the near term. It would be better to prefer defensive sectors for some time until the market stabilises,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs3,110.69 crore, according to exchange data.

In the broader market, the BSE midcap gauge fell 0.99 per cent and smallcap index declined 0.98 per cent. Among the indices, bankex fell by 1.75 per cent, auto declined by 1.58 per cent, financial services (1.35 per cent), realty (1.16 per cent), consumer discretionary (1 per cent), utilities (0.97 per cent), power (0.90 per cent) and commodities (0.75 per cent).