NEW DELHI: Domestic equity market gave up its early gains on Thursday with the benchmarks – Sensex and Nifty50 – plummeting up to 1% intraday even as most global markets advanced following an expected 25 bps rate hike by the US Federal Reserve.
The 30-share index BSE Sensex declined 440 points or 0.66% to settle at 66,267 while the broader NSE Nifty50 fell 0.60% to end below the 19,700 level. This is the fourth time in the last 5 sessions that the indices are closing in red.
“Markets witnessed wild gyration on the expiry day as the US Fed signalling one more rate hike dampened the sentiment and prompted investors to book profit in automobile, banking and oil & gas shares. However, realty and pharma shares were in the limelight after the recent correction. Many investors are not comfortable with the current valuations, and hence are redeeming their investment on every possible opportunity,” said Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.
Technically, on daily charts Nifty has formed a lower top and bearish candle, which is indicating further correction from current levels, added Chouhan. The Fed in its recent meeting raised interest rates by 0.25% to the range of 5.25%-5.50%, the highest level in last 22 years.
The Fed also stated it will watch the incoming data and study the impact of its rate hikes on the economy “in determining the extent of additional policy firming that may be appropriate” to reach its 2% inflation target. Meanwhile, the US economy grew at 2.4% annual growth rate between April and June this year, beating the 1.8% estimates by a margin.
“While expectations of a rate hike in the September meeting are still alive, it is likely that this was the last rate hike in the current cycle. The US central bank could now go into a hawkish pause. It could continue to dissuade dovish expectations as it would like to prevent any pre-mature pricing in of rate cuts,” said Deepak Jasani, head of retail research, at HDFC Securities. A pause in rate hike by the US Fed would also prompt other central banks, including the RBI, to end the rate hike cycle.
Netweb makes blockbuster market debut
NEW DELHI: After IdeaForge, Senco and Utkarsh Small Finance Bank, Netweb Tech made blockbuster market debut on Thursday. Netweb Technologies shares got listed at `947, an 88% premium to the issue price of `500. This was expected given the strong IPO subscription numbers and premium it was commanding in grey market. Anubhuti Mishra, equity research analyst, Swastika Investmart, said such a premium is justified because Netweb is a leading provider of high-end computing solutions in India. The `631 crore IPO of Netweb was subscribed 90.36 times. ENS