Indian Stocks Slide, Await Powell
Dear Trader…
Ahead of Fed Chair Jerome Powell's speech at Jackson Hole that has left traders and investors worried over further possible interest hikes, Indian equity markets ended in the red for the second straight session on Friday and extended losses for a fifth straight week.
Selling was seen across all major sectors. The BSE benchmark Sensex fell 365 points or 0.56 per cent to settle at 64,886 points, while the broader NSE Nifty50 declined 172 points or 0.89 per cent to end at 19,223.
The slide in domestic equities on Friday also came after the minutes of the RBI's latest policy meeting flagged near-term risks to inflation due to a recent spike in food prices and a liquidity overhang in the banking system. Investors now await Federal Reserve Chair Powell's speech at an annual gathering of global central bankers, due later on Friday, for cues into the US central bank's rate trajectory.
From the Sensex pack, L&T, JSW Steel, IndusInd Bank, Power Grid, ITC, and M&M closed lower, while Bajaj Finserv, Asian Paints, Bajaj Finance, Bharti Airtel, and ICICI Bank closed higher.
The market capitalisation of all listed companies on BSE declined by Rs 1.93 lakh crore to Rs 306.74 lakh crore. The market breadth was skewed in the favour of the bears. About 2200 stocks declined, 1444 surged, and 119 remained unchanged on the BSE.
FII and FPIs, on friday saw a net purchase of Rs.4638.21 crore in the cash segment. A total of Rs.15567.82 crore was sales against a total purchase of Rs.10929.61 crore. Domestic institutional investors saw a net purchase of Rs.1414.35 crore in the cash segment. A total of Rs.7128.09 crore was sales against a total purchase of Rs.8542.44 crore.
Meanwhile, Investor caution is evident globally, as concerns about potential rate hikes dominate the prevailing sentiment ahead of the Jackson Hole meeting.
Furthermore, the minutes from the RBI MPC meeting reiterated their dedication to managing inflation within the target range, given the elevated domestic inflation levels. However, the expectation of a rate hike remains subdued, as the current high inflation is perceived as transitory.
Technically, the important key resistances are placed in August Nifty futures at 19223 levels, which could offer more upside for the market. Sustainability above this zone would signal a directional upmove with immediate resistances seen at 19303–19404 levels. Immediate support is placed at 19009–18808 levels.
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