Inflation, interest rate hike fears playing on mkts mind

It really was a terrible day today. It did not look like a 500-points sell-off day in the morning. But it was sluggish and moved downhill through the session. Clearly the inflation and interest rate fears are coming to the fore now. The Nifty lost 100 points in last two days. Today, it lost 150 points in a single session which is 4% down for the week. The autos, banks, cement stocks and metal stocks have hit today.

It is a complete sell off in many stocks. During the week, it got a little offset by FMCG and IT but that was not enough. Yesterday was banks and today, it was metals. Hindalco was down by 8% and it sparked a sell off in metals. Sail, Tata Steel, JSW Steel, Sesa Goa and all the large heavyweights in metals were hammered today. Autos have also been correcting. Yesterday was the turn of the two wheelers, but today, Tata Motors and M&M were hammered by 4% and 5% a piece. Among large cap names; Bharti in Telecom, Ambuja in cement, Infosys and TCS in IT space have been very resilient. They came off and then corrected. Today Reliance and HDFC were down. There were a very few winners. ICICI Bank saw little bit of nibbling but that was just a one off. The breadth was terrible. It was like one advancing stock to ten declining stocks which were really bad. The volumes were high with nearly Rs 1.75 lakh crore. Today was a sell off with high volume and bad breadth with very few places to hide. There is no point talking about the individual stocks. Alok and Arvind textiles were a few sectors that stood out in the weakness and had a bad sell off. The banks looked weak. Yes Bank, IndusInd Bank, Indian Bank and Corporation Bank were punished. We saw some buying in a few banks like Bank of India, Bank of Baroda and Union Bank. Ashok Leyland and TVS Motors in autos have corrected quite a bit these last couple of days. From the consumption related space, VIP and Delta Corp were down. Polaris in IT and HOEC were pummelled today. It was a terrible day for midcaps. Chambal fertilizers, Bata, Praj Industries held out. Today, we saw more losers than winners by a long shot. There were signs of institutional selling today from the way the largecaps came off.