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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.

-Consumer sentiment rebound under threat
-India’s April services growth at 5-month high
-Heat wave making India’s power crisis worse
-We’re in financial crisis say Andhra Pradesh power discoms
-Adani is said to scout for media assets
-Tata Power Solar bags Rs 5,500 crore order

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

Domestic markets witnessed a volatile day of trade as investors came to terms with significant tightening of financial conditions both home and abroad.

Markets started off on a strong note despite a 50-basis-point rate hike by the US Federal Reserve late last night as the central bank downplayed suggestions of future rate hikes in tranches of 75 basis points each.

Moreover, the pace at which the Fed plans to trim down its balance sheet is also slower than had been feared, easing concerns of a rapid exodus of global capital from emerging markets.

However, as the day progressed, headline indexes succumbed to profit booking and gave up gains as the reality of an abrupt shift to a higher domestic interest rate regime sank in.

The RBI, on Wednesday, announced an off-schedule rate hike of 40 basis points to tackle high inflation. With benchmark policy rates heading higher cost of capital for firms is set to rise, while surging sovereign bond yields pose a threat to equity valuations.

The BSE barometer Sensex swung in a band of 953 points before settling 33 points higher at 55,702.23 points.

Its broader peer, the Nifty50, moved in a band of 293 points and then went on to settle 5 points higher at 16,682.65.

Broader markets fared worse than their headline peers, with the BSE Midcap and Smallcap indexes shedding 0.2 and 0.3 per cent, respectively. Fear gauge India VIX fell 7.2 per cent to end at 20.29.

14 of the 30 stocks on the BSE Sensex gained, with Tech Mahindra rising 4 per cent, followed by Infosys which gained 3 per cent. HCL Tech also gained 3 per cent, while Wipro and Tata Steel rose 2 per cent each.

IndusInd Bank was the largest loser of the day, shedding 4 per cent. Nestle, UltraTech and Sun Pharma each declined 3 per cent, while Reliance lost 2 per cent.

26 stocks hit 52-week highs while 34 touched 52-week lows.

We have Ajit Mishra from Religare Broking to share his views on the action and the road ahead:

Welcome to the show, sir:
1. The Sensex and the Nifty gave up most gains by the end of the session. Going ahead, what does an aggressive Fed mean for Indian equities?
2. With the RBI also hiking rates, financial conditions are tightening domestically and globally. Which are the sectors that stand to be most affected?

We also caught up with Sameet Chavan of Angel One Broking to decode the technical charts for you.
1. The Nifty50 gave up most gains and settled below 16,700. What do the technical charts suggest about it?
2. Nifty Bank declined even as the headline index stayed in the green. After the RBI’s CRR hike what is the outlook on the sector?

Asian markets ended mixed for the day. Major European markets were trading with decent gains 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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