Mumbai : Benchmark stock indexes opened at their lowest level in two months on Monday, but improved significantly during the day, as global markets shook after US Federal Reserve Chairman Jerome Powell’s comments on interest rates.
The recovery prompted analysts to remain bullish on the equities, though fear gauge VIX was testing a two-month high of 19.82 and the rupee a new low of 80.13 against the dollar.
The Nifty index fell 246 points to end at 17,312.9, while the Sensex lost 861 points to end at 57,972.62. Both the indices closed sharply above the day’s lows of 17,166.2 and 57,367.47, respectively, as domestic institutions moved lower, buying a provisional value of shares. Despite Rs 144 cr, FIIs make temporary selloff 561 crore equity. The last time the indices fell so sharply was on June 13.
“The US market has issues, but the sharp fall in our neck of the woods will be used as an opportunity,” said Nirmal Jain, founder and chairman, IIFL Group. SIP (Systematic Investment Plan) investment remains stable, at high 12,000 crores for the third consecutive month in July, which will probably prevent a free fall in our markets.”
Heavyweight stocks that bore the brunt of the selling pressure included Tata Consultancy Services Ltd, HCL Technologies Ltd, Wipro Ltd, Infosys Ltd and Tech Mahindra Ltd, falling between 2.78% and 4.6%, reflecting Friday’s carnage on Nasdaq, which fell about 4%. Gainers included Asian Paints, Nestle India, Apollo Hospitals, Maruti and Britannia Industries, rising 0.5-1.5%.
The Indian market has recovered 18.5 per cent from the mid-June low of 15,183 on August 19 at 17,992.2 due to foreign institutional investors (FII) buying. But profit-booking at higher levels saw the index correct from that level, much of which was happening on Monday. FIIs continue to be buyers despite day’s steep fall India has outperformed emerging markets in hotspots such as Russia and China in 49,140 million domestic stocks this month.
Siddharth Bhamre, Head of Research, Religare Broking said Nifty may not break the strong support of 16,800 and climb above its all-time high of 18,604 by the end of the year.
“Since October last year whenever we have gapped, Nifty has closed at an initial low even below that. But, today (Monday), we saw that the market is staging a smart recovery from the day’s lows, indicating that there are buyers at lower levels, and this means that we are fundamentally looking to test new highs. are better than In addition, Fed Chairman Powell’s remarks on Friday is not new, the market has already discounted a 1% hike in the FFR (Fed Funds Rate) through 3.5% through the end of the year,” Bhamre said.
The rupee hit a new low of 80.13 against the dollar, and the 10-year government paper rose 3 basis points to 7.25%, tracking sentiment in global markets after Fed Chairman Jerome Powell’s scathing statement that the Fed would be raising inflation. Will deal with. the cost of economic development. The currency opened as low as 80.11 in the first few minutes of trade as the dollar index strengthened up to 109.43 points.
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