Benchmark Indices Give Up Intra-day Gains, Sensex Slumps 311 Pts
Indian benchmark indices erased all intra-day gains in a highly volatile trade to close in red on Thursday. Investors assessed a slew of factors during the day ranging from Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium on Friday which will give a glimpse of economic outlook and the pace of future rate hikes.
Markets had a positive start on Thursday ahead of the expiry of monthly derivative contracts but at close all the gains were wiped off.
At close, the Sensex was down 310.71 points or 0.53 per cent at 58,774.72, and the Nifty was down 82.50 points or 0.47 per cent at 17,522.50.
"Amid heightened volatility, investors pruned their long positions on the F&O expiry day due to the uncertain global economic scenario. There are concerns that the Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium on Friday would focus on more rate hikes to rein in inflation. Also, benchmark indices had come close to slipping into negative zones in the last two sessions, and hence correction was on expected lines," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
On the Nifty, Shree Cements was the star of the day, gaining 2.18 per cent. Other top gainers on the Nifty included, Divis Laboratories (1.12 per cent), Hindalco Industries (0.91 per cent), Eicher Motors (0.89 per cent) and Grasim Industries (0.78 per cent).
Adani Ports & SEZ Ltd was the top loser on Nifty, shedding 2.43 per cent. Other losers on the index included Bajaj Finance (1.81 per cent), Power Grid Corporation (1.33 per cent), Infosys (1.20 per cent) and NTPC (1.18 per cent).
Realty and PSU Bank rose 1-2 per cent, while selling was seen in the IT, auto, bank, oil & gas, pharma and FMCG names.
Bharti Airtel rose as much as 2 per cent after Singapore Telecommunications Ltd said it would sell a 3.3 per cent stake in Airtel to Bharti Telecom for an aggregate consideration of about $1.61 billion.
Another factor that cautioned investors on Thursday was Crude Oil surging past the $100 per barrel mark. The rise is being attributed to concerns that the US will not consider additional concessions to Iran in its response to a draft agreement that would restore Tehran’s nuclear deal and potentially the OPEC member’s crude exports.
Investors also exercised caution ahead of key macroeconomic data next week and avoided any long positions. India will announce the GDP numbers for the quarter ended June 2022.
SBI predicts the growth to be over 15 percent, ICRA economists said it could be 13 percent, helped by the low base of last year when the Covid-19 pandemic hurt economic growth.
Earlier in the day, however, S&P Global gave a positive outlook for the Indian economy and said that India has built up buffers against cyclical difficulties and has ample foreign exchange reserves to withstand pressure on credit worthiness.
It also said it does not expect near-term pressure to have a serious impact on India’s credit worthiness and that they are expecting a strong level of GDP growth of 7.3 per cent this fiscal.
On the technical outlook, Chouhan said, "Lower top formation on intraday charts and bearish trend reversal candle on daily charts is indicating further correction from the current levels. In the short term, 17700 would be the key resistance zone and below which, the Nifty could slip till 17400-17300. On the flip side, a fresh uptrend is possible only after 17700. Above the same, the index would move up to 17800-17850."
