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Market off day`s low, European stocks decline

Published on Sep 22, 2022 13:31

The domestic equity barometers came off the day`s low in the afternoon trade. Domestic sentiment was dented amid negative global cues. The Nifty traded above the 17,600 level after hitting the day`s low of 17,532.45 in the afternoon trade. FMCG, media and metal stocks rose while bank, financial services and realty shares decline.

At 13:28 IST, the barometer index, the S&P BSE Sensex, was down 293.74 points or 0.49% to 59,163.04. The Nifty 50 index declined 77.40 points or 0.44% to 17,640.95.

In the broader market, the S&P BSE Mid-Cap index shed 0.05% while the S&P BSE Small-Cap index rose 0.01%

The market breadth was negative. On the BSE, 1,554 shares rose, and 1,812 shares fell. A total of 143 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.

Economy:

The Union Cabinet on Wednesday (21 September 2022) approved the Ministry of New & Renewable Energy`s proposal for implementation of the Production Linked Incentive Scheme (Tranche II) on `National programme on High Efficiency Solar PV Modules`, with an outlay of Rs 19,500 crore. The national programme on High Efficiency Solar PV Modules aims to build an ecosystem for manufacturing of high efficiency solar PV modules in India, and thus reduce import dependence in the area of Renewable Energy.

Meanwhile, The Union Cabinet also approved the National Logistics Policy. The vision is to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem for accelerated and inclusive growth. The policy lays down an overarching interdisciplinary, cross-sectoral, multi-jurisdictional and comprehensive policy framework for the logistics sector.

Gainers & Losers:

Hindustan Unilever (up 1.91%), Asian Paints (up 1.28%), Eicher Motors (up 1.26%), ITC (up 1.22%) and Adani Ports and Special Economic Zone (APSEZ) (up 1.16%) were top Nifty gainers.

Power Grid Corporation of India (down 2.60%), Axis Bank (down 2.20%), Bajaj Finserv (down 2.16%), SBI Life Insurance Company (down 2.03%) and HDFC Bank (down 1.85%) were major Nifty losers.

Stocks in Spotlight:

Heritage Foods declined 0.73%. The board of the dairy enterprises is scheduled to meet on Friday, 30 September 2022, to consider raising funds by issuing equity shares on a rights basis.

Ashoka Buildcon gaind 1.88% after the company announced that it received a letter of acceptance (LOA) from the South Western Railway (SWR) for a construction project worth Rs 258.12 crore. The completion period is 24 months from the date of appointed date.

KPI Green Energy advanced 2.87% after the company announced the receipt of a new order of 5.40 MW under wind-solar hybrid power project under CPP segment. The power producer said that it has received a new order for executing wind-solar hybrid power project of 5.40 MW (comprising of 5.40 MW wind turbine and 4 MWdc solar) capacity from Surat-based Greenlab Diamonds LLP under the `captive power producer (CPP)` business segment of the company.

Suzlon Energy jumped 8.55% after the company said that its board will meet on Sunday, 25 September 2022 to consider and approve the terms and conditions of the rights issue including determination of the price.

Kirloskar Oil Engines (KOEL) gained 2.31%. 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.

Global Markets:

Shares in Europe and Asia tumbled on Thursday after the U.S. Federal Reserve raised interest rates and signaled further hikes ahead.

The Swiss National Bank on Thursday raised its benchmark interest rate to 0.5%, a shift that brings an end to the negative rates in Europe. The 75 bps hike follows an increase to -0.25% on June 16, which was the first rate rise in 15 years. Prior to this, the Swiss central bank had held rates steady at -0.75% since 2015.

The Bank of England (BoE) expected to hike interest rates. The BoE is faced with a crucial choice as it navigates a plunging currency and the effects of a new government energy cost package that has changed the inflation outlook.

Japan`s central bank is expected to hold interest rates at ultra-low levels and maintain its yield curve control policy as its meeting concludes Thursday. Australia`s market is closed for a holiday.

Wall Street`s main indexes dropped on Wednesday, as investors digested another supersized Federal Reserve hike and its commitment to keep up increases into 2023 to fight inflation.

The Federal Reserve raised benchmark interest rates by another three-quarters of a percentage point and indicated it will keep hiking well above the current level. That takes the bank`s benchmark overnight rate target range to 3-3.25%.

Federal Reserve Chair Jerome Powell vowed on Wednesday that he and his fellow policymakers would "keep at" their battle to beat down inflation.

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