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Welcome to ETMarkets Watch, the show about stocks, market trends and money-making ideas. I am Bhaskar Dutta and here are the top headlines at this hour.

-India likely to seal Free Trade Agreement with European Union by next year
-Asian Games 2022 in China postponed
-Indicators show India on growth path says Piyush Goyal
-Banks take RBI’s cue, start rate hiking trail
-Govt mulls winding up companies with Chinese links
-PM likely to launch 75 digital banks on August 15

Let’s take a quick glance at what happened on Dalal Street today.

Domestic equity markets joined in a global market meltdown on Friday as a slew of rate hikes by central banks in just a couple of days left investors worried about even more aggressive policy tightening amid a bleak growth outlook.

Late Thursday, the Bank of England hiked interest rates and warned of surging inflation and the possibility of a recession in the UK. The move came on the heels of the US Fed and the Reserve Bank of India hiking interest rates earlier in the week.

With investors adjusting to the reality of financial conditions rapidly tightening both home and abroad, domestic equity markets sank on Friday, wiping out nearly Rs 4 lakh crore of investor wealth.

Hardening crude oil prices added to the sell-off by exacerbating worries on inflation and the trade deficit, given that India is a massive importer of the commodity.

Financial services, IT, metals, private banks, realty and consumer durables were among the counters that witnessed the heaviest selling pressure.

The BSE barometer Sensex swung in a band of 483 points before settling 867 points lower at 54,835.58. The index has given up a whopping 2,225 points over the last five trading days.

Its broader peer, the Nifty50, moved in a band of 143 points before closing 271 points lower at 16,411.25. The index has shed 4 per cent in the current week.
Broader markets suffered more than their headline peers, with the BSE Midcap and Smallcap indexes losing 2.1 per cent each. Fear gauge India VIX rose 4.7 per cent to close at 21.25.

On the 30-pack BSE Sensex, 24 stocks declined. Bajaj Finance led the losers, shedding 5 per cent, followed by Axis Bank which shed 4 per cent. Bajaj Finserv, Nestle and Wipro each lost more than 3 per cent.

Tech Mahindra, Power Grid and ITC each rose 2 per cent while SBI and NTPC gained 1 per cent.

10 stocks hit upper circuits while 3 hit lower circuit limits. 13 stocks touched their 52-week highs, while 96 hit 52-week lows.

We have Jatin Gohil from Reliance Securities to share his views on the action and the road ahead:

Welcome to the show, sir:
1. The rate hike theme seems to be catching up globally for equity markets. Given that India is just beginning the rate hike cycle, how much more of a downside could stock markets see?
2. With bond yields rising at a ferocious pace, do you see a threat to equity valuations?

We also caught up with Vaishali Parekh from Prabhudas Lilladher to decode the technical charts for you.
1. The Nifty50 slumped below the 16,450 level today. What do the technical charts suggest about it?
2. Nifty Bank fell in line with the headline index. What is your outlook on the sector?

Asian markets mostly ended lower. Major European markets were trading with cuts in the first few hours of trade. Meanwhile, US stock futures were down, signalling a weak start to US equities later in the day.

That’s all for now. Do check out ETMarkets.com for all the news, market analysis, investment strategies and dozens of stock recommendations. Enjoy your evening. Bye Bye!

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