Indices hit fresh intraday low; FMCG shares rise for 4th day

The key equity indices slumps and hit fresh intraday low in early afternoon trade. The Nifty slipped below the 17,550 level. FMCG shares, however, managed to outperform and extended gains for fourth consecutive session.

At 12:29 IST, the barometer index, the S&P BSE Sensex, was down 566.04 points or 0.95% to 58,890.74. The Nifty 50 index declined 175.80 points or 0.99% to 17,542.55.

In the broader market, the S&P BSE Mid-Cap index lost 0.62% while the S&P BSE Small-Cap index fell 0.35%

The market breadth was negative. On the BSE, 1,341 shares rose, and 1,980 shares fell. A total of 147 shares were unchanged.

The US Federal Reserve hiked its key interest rate by 75 basis points on Wednesday for the third consecutive time. The central bank`s officials forecast the target range for the benchmark policy rate to rise to 4.4% by the end of 2022 and reach 4.6% in 2023, as per the updated quarterly estimates published in conjunction with the statement.

The central bank has reiterated its commitment to fighting the decades-high inflation and works to push it under the targeted 2% range. The FOMC in its statement on Wednesday underlined that it is `highly attentive to inflation risks`.

With the 75-bps rate hike on Sept 21, the benchmark policy rate now lies in the 3-3.25% range, the highest level since before the financial crisis of 2008.

The projections by Fed officials indicate a probable fourth 75-bps rate hike in the next FOMC meeting in November.

Following this, the Indian Rupee on Thursday hit a fresh record low against US dollar. The currency opened at 80.2775 and touched a fresh all-time low of 80.7450 so far in the day`s trading sessions.

Derivatives:

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rose 4.13% to 20.13. The Nifty 29 September 2022 futures were trading at 17,549.40, at a premium of 6.85 points as compared with the spot at 17,542.55.

The Nifty option chain for the 29 September 2022 expiry showed maximum Call OI of 46.2 lakh contracts at the 18,000 strike price. Maximum Put OI of 38.8 lakh contracts were seen at 17,500 strike price.

Buzzing Index:

The Nifty FMCG index added 0.83% to 44,870.25. The index has added 3.88% in four sessions.

Varun Beverages (up 2.54%), Marico (up 2.5%), ITC (up 1.26%), Hindustan Unilever (up 1.16%) and Britannia Industries (up 1.04%), Dabur India (up 0.76%) and Nestle India (up 0.38%) edged higher.

Meanwhile, Radico Khaitan (down 2.36%), Godrej Consumer Products (down 2.16%) and Tata Consumer Products (down 1.87%) moved lower.

Stocks in Spotlight:

Mahindra & Mahindra (M&M) shed 0.54%. M&M said that India Ratings and Research has affirmed the company`s long-term (LT) issuer rating at `IND AAA` with `stable` outlook.

Kirloskar Oil Engines (KOEL) jumped 3.78%. The company announced its plans to acquire balance 24% stake in Ahmedabad-based La-Gajjar Machineries (LGM). The company had acquired 76% stake in LGM in the year 2017 with an agreement that the balance holding will be acquired by KOEL over a 5-year period. By completing the acquisition as per previously agreed timelines, LGM will become a 100% subsidiary of KOEL.

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