 "Stock broker looking at screen outside the Bombay Stock Exchange")
Domestic indices were flat during early morning trade on Friday, amid mixed global cues, but upside gains were capped on caution after UD Fed Chairman Janet Yellen’s testified that chances of December rate hike has risen on improving US economy. Further, the rupee dropped to a 5-month low on the back of strong gains in the US dollar.
Both the benchmark indices which opened marginally higher failed to sustain gains at higher levels. Senseex fell 28 points within minutes while the broader Nifty 50 index maintained the crucial 8,050 level.
At 10:33 am, the S&P BSE Sensex was down 48 points at 26,180 and the Nifty50 fell 10 points points to 8,069. In broader markets, BSE Midcap rose 0.18% while BSE small cap was down 0.52%.
“NIFTY (8080) Nifty index continued its negative sentiment and has been making lower highs – lower lows from last four trading sessions. However it witnessed a bounce back move towards 8150 but that was short lived and it corrected towards 8060 levels. Finally index closed negative with the loss of around 30 points but now pace of selling is getting lesser but requires negating immediate negative trend for any sort of stability in the market,” Anand Rathi Equity Advisory said in a technical note.
Stocks and Sectors
Consumer durable and metal indices were the top sectoral losers falling more than 1% each while oil & gas and power sector gained.
NTPC was the top gainer rising more than 3.5% in today’s trade followed by Sun Pharma, up 2.5%.
Other gainers include, ONGC, M&M and Bharti Airtel which rose 0.9%-1.5% each.
Petronet LNG rallied 8% to Rs 374 on the BSE in early morning trade after the company reported robust 82% year on year (YoY) jump in net profit at Rs 460 crore for the quarter ended September 30, 2016 (Q2FY17).
The company had registered a net profit of Rs 253 crore in the corresponding quarter a year ago.
Among losers Tata Motors, TCS, ITC, GAIL were all down more than 1% on Thursday’s trade.
Rate hike worries
Janet Yellen has warned in her overnight address that, “Were the FOMC to delay rate increases for too long, it could end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting the committee's longer-run policy goal.”
Yellen’s address led to a surge in US stocks as well as the Dollar rate. The Dollar rose to a 13.5 year hike against Asian market currency but the investors here remained cautious leading to a negative opening.
IT sector cautious
The IT stocks have fallen more than 2% since Donald Trump’s surprise presidential victory and weak Rupee. The sector has seen a lot of selling in the market. Nasscom’s recent downgrade of IT export growth forecast to 8-10% for 2016-17 also hit the stocks. The index opened in red in today’s session too.
Demonetisation woes continue
Demonetisation has now started affecting not just demand but also the supply chain with cash crunch hitting the farmers. Prices of few key commodities have fallen considerably since the move was announced amid drying up of demand. Now, fears have risen regarding production of the key commodities as farmers are not getting enough cash to buy seeds for winter crops.
Global markets
The dollar vaulted to 13.5-year highs against a basket of major currencies as U.S. bond yields rose, leaving Asian stocks vulnerable to potential rotation out of emerging markets to the United States.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3% in early trade to hover just above its four-month low touched earlier in the week. It looks set to log its fourth straight week of losses.
On Wall Street, the benchmark S&P 500 index rose 0.5% to within a hair of its record high as bank stocks were boosted by bets on higher interest rates and consumer discretionary stocks were helped by favorable economic data and earnings.
US consumer prices posted their biggest increase in six months, while housing starts surged to 9-year high and jobless claims fell to the lowest level since November 1973.
(With inputs from Reuters)
