Markets opened on a flat note on Friday morning amid a sharp global selloff. Rate hikes are draining liquidity, sparking losses in a range of assets, with equity markets facing one of their worst weeks since pandemic-induced turmoil of 2020. At 9:16 am, the BSE Sensex fell 400 points to 51,081, while the NSE Nifty shed 117 points to 15,240.
Top Gainer and Losers
On the Sensex, Wipro, TCS, HCL Tech, Titan, Tech M, IndusInd Bank, HDFC and Asian Paints led losses, down up to 2.6 per cent. Britannia, Tata Motors and HDFC Life were among losers on the Nifty.
Reliance, NTPC, Tata Steel, Coal India, Bajaj Auto, and ITC, meanwhile, were the sole players in green on the two benchmarks.
Broader Markets
In the broader markets, the BSE MidCap and SmallCap indices shed up to 1.3 per cent. Sectorally, realty, IT, pharma, consumer durables were the top laggards on the Nifty. Auto and banks also sat in red. Nifty metals was the sole gainer.
Among stocks, Delta Corp rose over 2 per cent. The company’s subsidiary Deltatech Gaming has filed draft papers for an IPO worth Rs 550 crores.
Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services, said: “The dominant theme impacting equity markets globally is the synchronised global monetary tightening and the consequent fears of economic slowdown. The probability of the US slipping into recession is much higher now. Markets are discounting these concerns. The PE of the S&P 500 is now around 16, close to the long-term average. Europe is trading at around 11 times. Markets will bottom out earlier than the economy does. In India, valuations have declined, but are even now above the long-term average. So, FPIs will continue to sell, capping a relief rally that can come at any time. It is impossible to predict the market bottom. The ideal Investment strategy now should be calibrated buying high-quality growth stocks. Mutual fund SIP investors can consider increasing the amount of investment.”
Global Cues
The US equity markets saw a sharp selloff as investors’ grappled with recession fears post the US Federal Reserve’s aggressive rate action. The Dow Jones breached below 30,000 levels, the lowest seen since January 2021, while Nasdaq fell over 4 per cent, the highest drop witnessed since September 2020.
The Bank of Japan maintained ultra-low interest rates on Friday and its guidance to keep borrowing costs at “present or lower” levels, signaling its resolve to focus on supporting the economy’s recovery from the COVID-19 pandemic. However, in a nod to the hit that the yen’s recent sharp declines may have on the economy, central bank said it must “closely watch” the impact exchange-rate moves could have on the economy. At the two-day policy meeting that ended on Friday, the BOJ maintained its -0.1 per cent target for short-term rates and its pledge to guide the 10-year yield around 0 per cent by a 8-1 vote.
Asian shares opened with fresh losses on Friday morning following another sell-off on Wall Street as a series of hikes by central banks to fight inflation this week fanned concerns that economies could tip into recession. MSCI’s index of Asia-Pacific shares outside Japan was down by 0.42 per cent.
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