Sensex drops 337 pts, Nifty ends below 17,650; HDFC twins drag

Equity benchmarks declined for the second consecutive session on Thursday, tracking negative global cues. The US Federal Reserve`s hawkish undertone on interest rate fuelled pessimism amongst the investors. Trading was volatile due to expiry of weekly index options on the NSE. Rate sensitive banks and financial shares were under pressure. On the other hand, media and FMCG shares climbed. The Nifty settled above the 17,600 mark after hitting the day`s low of 17,532.45 in early afternoon trade.

The barometer index, the S&P BSE Sensex, slipped 337.06 points or 0.57% to 59,119.72. The Nifty 50 index declined 88.55 points or 0.50% to 17,629.80.

Titan Company (up 2.79%), Hindustan Unilever (up 2.63%), Asian Paints (up 2.47%), Maruti Suzuki India (up 1.85%) and Eicher Motors (up 1.85%) were top NIfty gainers.

Power Grid Corporation of India (down 3.08%), HDFC Bank (down 2.12%), Axis Bank (down 2.07%), HDFC (down 1.82%) and ONGC (down 1.76%) were major Nifty losers.

In the broader market, the S&P BSE Mid-Cap index added 0.32% while the S&P BSE Small-Cap index rose 0.47%.

The market breadth was positive. On the BSE, 1,676 shares rose, and 1,764 shares fell. A total of 149 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.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper ended flat at 7.233.

The Indian Rupee hit a fresh record low against US dollar of 80.95 in the day`s trading sessions. The partially convertible rupee settled at 80.86, compared with its close of 79.9675 in the previous trading session.

MCX Gold futures for 5 October 2022 settlement rose 0.61% to Rs 49,475.

The 10-year U.S. Treasury yield was hovering at 3.556%.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.28% to 110.96.

In the commodities market, Brent crude for November 2022 settlement rose 42 cents or 0.47% at $90.25 a barrel.

Global Markets:

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

The Bank of England raised its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to "respond forcefully, as necessary" to inflation, despite the economy entering recession. This is its seventh consecutive rise and takes U.K. interest rates to a level last seen in 2008.

Meanwhile, the Swiss National Bank on Thursday raised its benchmark interest rate to 0.5%, a shift that brings an end to an era of negative rates in Europe.

The Bank of Japan decided Thursday to keep its current massive monetary easing policy unchanged, making even more apparent its different policy stance from those of U.S. and European central banks. The BOJ Policy Board unanimously voted to keep its short-term policy interest rate at minus 0.1% and continue to guide 10-year government bond yields around 0%.

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

Stocks in Spotlight:

Fortis Healthcare slumped 14.75% after the Supreme Court ordered a forensic audit of the share sale in Fortis Healthcare in 2018 and refused to allow the open offer from Malaysia`s IHH Healthcare to proceed.

Aptus Value Housing Finance India jumped 6.08% to Rs 315.75 after a foreign brokerage reportedly initiated coverage on the stock with a `buy` rating and a target price of Rs 425.

Ashoka Buildcon gaind 2.43% 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 3.92% 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 surged 12.88% 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.

KP Energy hit an upper circuit of 5% after the company announced that it has secured an order for development of 8.1 megawatt (MW) hybrid power project (comprising of 8.1 MW wind capacity and 6 MW solar capacity) in Gujarat.

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