Indian Equities End Almost Flat As Investors Digest Fed's 'Not Done Yet' Stance
Indian equity benchmark indices ended marginally lower on Thursday in a volatile session as investors digested Federal Reserve's 75 bps rate hike but, most notably, the commentary by Fed Chair Jerome Powell, who suggested that it would be "premature" to pause monetary tightening.
At Close, the Sensex was down 69.68 points or 0.11 per cent at 60,836.41 while its broader peer, Nifty, ended 30.10 points or 0.17 per cent lower at 18,052.70.
However, the Indian market's performance, post the rate hike was still better compared to other Asian and European peers and Wall Street.
"Technically, on the backdrop of weak global cues, our market opened with a negative note, but after a gap-down opening, it bounced back sharply. However, after an early morning intraday rally the entire day, the market witnessed range-bound activity. The current market texture is non-directional perhaps traders are waiting for either side breakout," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
In a press conference shortly after the US Federal Reserve delivered its fourth consecutive rate hike, Powell stated that interest rates will ultimately be "higher than previously expected."
The policy decision set the target federal funds rate between 3.75 per cent and 4.00 per cent, the highest since early 2008.
Even before the Fed met for its November meeting, global markets were rallying as they had factored in the 75-bps rate hike as the 'new normal.' However, the Fed's policy statement said that it will take into account the cumulative tightening of monetary policy, which analysts said hinted at smaller sized rate hikes from December.
Investors fretted over hawkish comments, and Wall Street ended lower in a volatile session, with the S&P 500 shedding 2.5 per cent, the Dow Jones Industrial Average ending 1.55 per cent lower and the Nasdaq Composite slipping 3.36 per cent.
On India's benchmark 30-share Sensex, State Bank of India stood out as the star of the day, gaining 1.89 per cent, followed by Titan, Bharti Airtel, Tata Steel and Hindustan Unilever.
Tech Mahindra, Power Grid Corporation, NTPC, Infosys and Wipro were the top loser on the Sensex.
Among sectors, except the bank, realty and FMCG, all other sectoral indices ended in the red.
Adani Wilmar closed 2.4 per cent lower after reporting a 73 per cent slump in September-quarter profit as high-cost inventory crimped margins.
Indigo Paints ended 11.9 per cent higher, reporting a second-quarter profit that more than doubled.
On the technical outlook, Chouhan said, "For the bulls now 18,150/61,100 would be the fresh breakout level and above which the index could rally till 18,250-18,300/61,300-61,500. On the flip side, a fresh round of selling is possible only after dismissal of 17,950/60,500. Below which, the index could slip till 17,850-17,800/60,300-60,150."
