Domestic equity markets opened sharply lower on Thursday, bucking the buoyant sentiments in the global markets, spooked by sharp selloff in the Adani Group stocks. Even the budget announcements failed to life the mood of the markets as Adani scars worsened further.
On the other hand, global stocks cheered after the US Fed increased interest rates by 25 basis points and the chairman Jerome Powell's commentary turned slightly dovish.
The US Fed hiked interest rates by a widely anticipated 25 bps. This marks yet another slowdown in the tightening interest rate cycle. However, this time around the Fed Chief Jerome Powell gave first dovish hints, said Apurva Sheth, Head of Market Perspectives & Research, Samco Securities.
"This was a good enough sign that we might be almost at the end of the rate hike cycle given that inflation is speeding down swiftly. US stock markets cheered dovish remarks from the Fed since cost of capital is on its way down," he said.
At 9.20 am, BSE Sensex was trading 358.24 points, or 0.60 per cent, lower at 59,349.84, whereas NSE's Nifty50 was down 153.90 points, or 0.87 per cent, at 17,462.40. BSE midcap index shed half a per cent, wherea smallcap index was also down. Fead gauge India VIX spiked more than 4 per cent to 17.51-level.
"The Nifty witnessed a roller coaster move as the Nifty oscillated by more than 1,100 points during the day. After an initial up move, profit booking resurfaced from 20 day’s EMA, resulting in the index breaching recent lows marginally. A fag-end up move helped the index to recoup most intraday losses," said ICICIDirect Research.
"Going ahead, we expect the index to prolong the consolidation in the broader range of 18000-17300 wherein stock specific action would prevail amid progression of earning season. Amid elevated volatility, we expect the index to hold the key support zone of 17500-17300, as it is confluence of key long-term moving averages," it said.
All major Adani Group stocks opened at lower circuit. Adani Enterprises, Adani Ports and SEZ, Adani Transmission, Adani Green Energy and Adani Total Gas plunged 10 per cent each, whereas Adani Power, Adani Wilmar and New Delhi Television shed 5 per cent each. Ambuja Cement rose slightly, but ACC dropped marginally.
On a sectoral front, Nifty IT index rose more than a per cent, whereas media and FMCG were also trading in green. Among the losers, Nifty PSU Bank and metal indices plunged 2 per cent each, whereas realty, private bank, financial services indices were down over a per cent each.
Barring the Adani Group stocks, HDFC Life tanked another 5 per cent among the bluechip counters. UPL was down 4 per cent, whereas State Bank of India, Bajaj Finance and ICICI Bank declined 2 per cent each. NTPC, Sun Pharma, Larsen & Toubro and HDFC also disappointed the investors.
ITC jumped over 2 per cent to hit new lifetime high level in the Nifty50 pack. Infosys, Tech Mahindra, HCL Technologies and Titan gained over a per cent each. Titan, Wipro and SBI Life Insurance and Tata Consultancy Services were also trading with decent gains.
Union Budget 2023 turned out to be excellent from the market perspective. Fiscal prudence, the clear glide path for fiscal consolidation, massive capex of Rs 10 lakh crores, relief to income tax payers, credible growth and tax projections for FY24 and above all the growth orientation of the Budget makes it market-friendly, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The excessive volatility triggered by the crash in Adani stocks will die down after sometime. FIIs will have to invest in India if they are to benefit from the India Growth Story. Meanwhile, the situation in the mother market of the US is slowly improving. The expected reduction in rate hike to 25bp and the slightly less hawkish commentary are positive for global equity markets," he said.
In the broader markets, Monarch Networth Capital extended its fall for another 8 per cent, Birlasoft was down 7 per cent ahead of its Q3 earnings. Omaxe, Nelcast and Jubilant Foodworks also shed 6 per cent each.
Zuari Agro Chemicals jumped over 12 per cent after budget euphoria, whereas Zuari Industries jumped 8 per cent. Barbeque Nation spiked 9 per cent, whereas Welspun Industries, Craftsman Automation, Garden Reach Shipbuilders gained 6-8 per cent each.
Also read: Q3 results previews: HDFC, Titan, Dabur India, Birlasoft and eClerx