The Indian stock market continues to be volatile amid various global events and monthly future and option expiry. Nifty opened the gap and headed towards its previous day’s low levels. The broadly tracked index touched an intraday low of 16,866.75. However, in the later part, a comeback was seen with the PSU Bank index rallying over 5 per cent in afternoon trade today, complimented by auto stocks, to stage a smart recovery. The benchmark index remained under pressure in the first half as noticeable selling was witnessed across the board. However, a rebound in select index majors pared some of the losses in the latter half. Finally, Nifty settled around 17,110 levels; down by 0.97 per cent.
On the global front, given that the US inflation rate reached 7 per cent in December, which is way above the US Federal Reserve’s target of 2 per cent, the logical expectation is a hike of at least 50 basis points. However, the Fed may also want to keep the hike gradual. In the December meeting, it signalled a forecast of three policy rate hikes, but the rising inflation has convinced market participants that there would most likely be four rate hikes. Experts believe that the Fed rate hike will result in higher volatility. “The emerging markets will feel the pressure as liquidity gets eroded. Foreign institutional investors have been net sellers in the Indian market and the US Fed’s increasingly hawkish stance is expected to continue putting selling pressure in Indian markets,” says Vishal Waugh, research head at Bonanza Portfolio, a broking firm.
In the BSE Sensex, of the 30 stocks, 60 per cent closed in the red. Among the Nifty stocks, 35 declined and 15 managed to close in the green zone. IT sectors continued to remain under pressure and dragged down both indices.
Though the US Fed meet is behind us, prevailing earnings season and the upcoming Union Budget in India are likely to keep the markets volatile.
Today’s market saw selling pressure from all the segments in the beginning. In the second half, buying in the banking and auto space uplifted the market mood and both the sector indices managed to close in green. The Nifty PSU Banks index stole the show with the highest gain of over 5 per cent. However, Nifty Healthcare Index fell by around 7 per cent due to profit booking; followed by the Nifty Consumer Durables index, which fell 5.21 per cent. The NSE IT index fell over 3.55 per cent. Nifty Midcap 100 and Smallcap 100 indices also felt the heat of selling pressure, which led to a slide of 1.05 per cent and over 0.73 per cent, respectively.
New-age IPOs could not face the market heat and melted the most. Investors ditched them, which led to a free fall in share prices. Food delivery app Zomato’s share price melted by around 10 per cent and closed at Rs90.50. The stock is trading around 50 per cent lower from its high. This stock has fallen over 23 per cent in a month. Similarly, Policy Bazaar’s parent company, PB Fintech, could not insulate itself from the heat and fell by over 5 per cent. Latent View, which was the darling of IPO investors and created history in terms of subscription, fell by 2.68 per cent. Paytm's parent company, One97 Communications, closed at Rs893.70, near its all-time low. This scrip has eroded 33.20 per cent of investor wealth in the last one month.
