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Taking Stock | Market loses more ground after US Fed rate hike; FMCG outshines

The broader indices outperformed the benchmarks, with BSE midcap and smallcap indices adding 0.3-0.5 percent

September 22, 2022 / 04:34 PM IST

Indian benchmark indices were under pressure for the second session in row on September 22 amid weak cues after the US Federal Reserve hiked interest rates and hinted more were to come in its war on inflation.

The Fed’s decision to go far a 75 basis point hike for the third consecutive time also sank the Indian rupee to a new low of 80.86 to a dollar, adding to the selling pressure.

At close, the Sensex was down 337.06 points, or 0.57 percent, at 59,119.72 and the Nifty ended 88.50 points, or 0.50 percent, lower at 17,629.80.

"The Fed turned more hawkish than anticipated, increasing its rate forecast to 4.4 percent by the end of 2022. The indication is that 125 bps more rate hikes can be expected in the next two policy meetings scheduled this year," said Vinod Nair, Head of Research at Geojit Financial Services.

"Following this, the US dollar index rose above 111, depreciating INR to beyond 80."

Close

The Indian market was able to remain resilient with limited cuts but if the rupee continues to weaken, equities would turn less attractive for foreign investors in the short term, affecting performance, he added.

Power Grid Corporation, Axis Bank, HDFC Bank, Coal India and HDFC were among the major Nifty losers.

The gainers included Titan Company, HUL, Asian Paints, Eicher Motors and Maruti Suzuki.

IndexPricesChangeChange%
Sensex58,191.29-30.81 -0.05%
Nifty 5017,314.65-17.15 -0.10%
Nifty Bank39,178.05-104.80 -0.27%
Nifty 50 17,314.65 -17.15 (-0.10%)
Fri, Oct 07, 2022
Biggest GainerPricesChangeChange%
Titan Company2,730.50137.65 +5.31%
Biggest LoserPricesChangeChange%
TATA Cons. Prod780.90-13.40 -1.69%
Best SectorPricesChangeChange%
Nifty Infra5036.2517.90 +0.36%
Worst SectorPricesChangeChange%
Nifty IT27733.60-195.20 -0.70%

On the sectoral front,  the Bank Nifty shed 1.4 percent and the PSU bank index fell nearly 1 percent. However, the FMCG index added 1.3 percent, the auto index 0.7 percent, the metal index 0.4 percent and the pharma index added 0.3 percent.

Also Read: Rupee hits fresh record low against US dollar

Stocks and sectors

On the BSE, the FMCG index added 1.3 percent and the auto index rose 0.7 percent, while bank, healthcare, metal, oil & gas and realty indices ended in the red.

Broader indices outperformed the benchmarks, with the BSE midcap and smallcap indices adding 0.3-0.5 percent.

A short build-up was seen in India Cements, City Union Bank and Power Grid, while a long build-up was witnessed in Tata Chemicals, Page Industries and Granules India.

Among individual stocks, a volume spike of more than 200 percent was seen in India Cements, RBL Bank and PVR.

ITC, Saksoft, PC Jeweller, Lemon Tree Hotels, Maruti Suzuki India, CG Power and Industrial Solutions and Aurionpro Solutions, were among the stocks which touched their 52-week highs on the BSE.

Also Read: IHH's open offer for Fortis to remain on hold, says Supreme Court

Outlook for September 23

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Indian markets reacted mainly to the Federal Reserve's hawkish undertone on interest rates that fuelled pessimism amongst the investors.

As expected, banking stocks bore the brunt, leading to an extended correction in local benchmarks.

Technically, the Nifty formed a lower top formation on daily and intraday charts and closed below the 20-day simple moving average (SMA), indicating the continuation of weakness in the near future.

The index has been consistently facing resistance at higher levels and at the same time regularly taking support near 17,500.

For traders, 17,500 and 17,700 would be the important level to watch out for. Below 17,500, the index can slip to 17,400-17,350. On the flip side, a range breakout over 17,700 can push the index up to 17,800-17,850.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty witnessed sharp swings in both directions on September 22. It attempted a bounce twice but faced resistance near the key hourly moving averages and the 20 DMA. Over there, it attracted a fresh round of selling. Thus 17,700-17,720 will act as an immediate resistance zone.

A tough battle between the bulls and the bears is a typical characteristic of a consolidation phase. Within this, the index is expected to slide to 17,430 and subsequently to 17,200 in the short term.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Rakesh Patil
first published: Sep 22, 2022 04:05 pm
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