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Markets correct on hawkish Fed, expiry blues

Mid-cap and small-cap indices also plunge; analysts expect bounce after Union Budget

Published: 28th January 2022 07:34 AM  |   Last Updated: 28th January 2022 07:34 AM   |  A+A-

Stocks, BSE, Sensex, NSE

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By Express News Service

MUMBAI:  Benchmark indices fell in line with Asian peers on Thursday but ended well above their intraday lows in the run up to the Union Budget on February 1 as European markets pared their opening losses. 
The Nifty ended down almost a percent at 17110.15, ending 240 points off the day’s low. The Sensex ended 838 points off its intraday low to close down a percent at 57276.94.

The indices, in line with Hang Seng and Nikkei, declined after perceived hawkish comments by the Fed chair to tame runaway inflation and fears that these could result in outflows from EMs. Market volatility also increased as Thursday marked the monthly derivatives expiry when traders close out or carry forward their bets to the next monthly series.

Fear gauge India Vix ended marginally lower by 1.36% at 21.07. A reading above 18-20 reflects heightened perception of risk among traders.  Retail investors also bore the brunt with mid-cap and small-cap indices declining by around a percent each. 

The fall from last Tuesday’s high of 18350.95 was led by relentless selling of foreign portfolio investors, who have sold shares worth `22,722 crore, over $3 bn, in the month through January 25. Market analysts believe a bounce could be due after the steep fall since last Tuesday amid the imminent Union Budget.

“A bounce could be in the offing , though it’s tough to take a call on a daily basis, given the heightened volatility,” said SK Joshi, director, Khambatta Securities . The top Nifty gainers included Axis Bank, SBI, Maruti, Cipla and Kotak Bank, up between 2% and 3%. The top losers were HCL Technologies, Tech Mahindra, Dr Reddys Lab, TCS and Wipro which shed 3-4%.



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