Benchmark indices, which appeared to be recovering from morning losses, lost ground again towards the end of the session as investors dumped stocks across the board. Sentiment remained lukewarm all day after Fed Chair Jerome Powell said overnight that a half percentage point rate hike is “on the table” for next month. At close, the Sensex was down 714.53 points or 1.23 percent at 57,197.15, and the Nifty fell 220.60 points or 1.27 percent at 17,172. About 1,447 shares have gone up, 1,882 shares have fallen, and 115 shares have remained unchanged.
While banking, financial services, pharmaceutical and metals indices were the hardest hit (down about 2 percent each), automotive, FMCG and IT indices were the least affected sectors, at 0.6 percent each.
In the broader markets, the BSE MidCap Index and SmallCap Index fell 0.7 percent and 0.4 percent, respectively.
Meanwhile, ten-year government bond yields in the money market hardened by 0.46 percent to 7.17 percent in India. Globally, 5-year US Treasury yields were above 3 percent in early deals.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “This extremely volatile market with no clear direction is affected by two factors on a daily basis: one, external and two, internal. The external factor is the erratic movement in the US parent market, where the S&P 500 and Nasdaq are up about 2 percent one day and falling about 2 percent the next. The internal factor influencing the market is the seesaw battle between FIIs and DIIs. Both these external and internal factors are now erratic and therefore the market is volatile without any direction.”
“Yesterday’s comment by the Fed chief that a 50bp rate hike is possible in May and that inflation control has become absolutely essential has pushed 10-year bond yields above 2.9% and consequently had an impact on the stock markets. But this impact is also likely to be temporary, as the market has already discounted this well-known Fed hawkishness. What investors should do in this time of great uncertainty is buy high quality stocks against sharp market corrections and wait patiently,” he added.
Global clues
Wall Street reversed course and took losses on Thursday, while oil gained as Federal Reserve chairman Jerome Powell suggested the US central bank would act aggressively to curb inflation. The Dow Jones Industrial Average closed 1.05 percent lower, the S&P 500 lost 1.48 percent and the Nasdaq Composite lost 2.07 percent.
Tokyo stocks opened lower Friday, adding to Wall Street losses following aggressive comments from the Federal Reserve about its monetary tightening plans. The benchmark Nikkei 225 index fell 1.49 percent or 410.48 points to 27,142.58 in early trading, while the broader Topix index fell 1.16 percent or 22.36 points to 1,905.64.
Hong Kong shares plunged on opening Friday, extending a week of losses after US Federal Reserve boss Jerome Powell suggested a rate hike was imminent. The Hang Seng index fell 2.03 percent or 420.61 points to 20,261.61. The Shanghai Composite Index lost 0.69 percent or 21.40 points to 3,058.40, while the Shenzhen Composite Index on China’s second exchange fell 0.65 percent or 12.58 points to 1,911.23.
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