Frontline indices the Sensex and the Nifty on November 10 morning gave up the previous session’s gains as the Federal Reserve Chair Jerome Powell turned hawkish, hinting at further interest rate hikes if needed.
Equity markets across the globe felt the jitters, while yields climbed up again. From three-month lows of 4.5 percent, the 10-year US Treasury yield gained 13 basis points to 4.636 percent. The S&P 500 lost 0.81 percent, while the Nasdaq crashed almost a percent.
At 11.42 am, the Sensex was down 89.68 points or 0.14 percent at 64,742.52, and the Nifty was down 20.50 points or 0.11 percent at 19,374.80. About 1,657 shares advanced, 1,380 declined and 114 remained unchanged.
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“The lingering concern that ‘the rates may remain higher for longer’ will continue as a headwind for stock markets for some time, but is unlikely to drag it down meaningfully. The Indian market texture indicates that the ‘buy on dips’ strategy will continue to work,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
FII selling is only temporary and as a sector, financials are likely to do well, he said. “For investors with a 2-year time horizon, the leading private banks and three or four PSU banks are good buys with good return potential. The mid and small-cap rally is partly driven by retail exuberance and since the valuations in this broader market are high, investors have to exercise some caution," Vijayakumar added.
Stocks and sectors
Force Motors hit the 5 percent upper circuit at Rs 4,053 as the company's profit grew nearly five-fold to Rs 94 crore. Aurobindo Pharma gained 1.7 percent in the morning trade, a day after the pharma firm recorded 83 percent year-on-year growth in consolidated profit for the September quarter.
Among the laggards, Ramco Cements slumped 5 percent to Rs 970 as investors booked profit after the company posted strong July-September quarter (Q2FY24) results.
Shares of Piramal Enterprises fell 2.47 percent at the open, a day after the financial services company posted a Q2 profit of Rs 48 crore against a loss of Rs 1,536 in the previous fiscal.
The broader market traded in the red, however, certain smallcap indices outpeformed the benchmarks, managing to eke out gains.
Sectorally, Nifty Auto, Nifty IT and Nifty Media recorded losses, falling up to 0.75 percent. The metal, realty and media indices clocked minor gains.
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