Vinod Nair, Head of Research at Geojit Financial Services:
The early gains led by an in-line Fed policy was dampened as recessionary fears haunted global sentiments. A cut in growth projection and hints of continuation of aggressive policy in the next meeting instilled chances of a recession in the US economy.
In this current scenario, safe sectors will be those that are least impacted by inflation & aggressive policy like Finance & Services. Defensives like Consumption, IT, Pharma & Telecom are worthwhile on a long-term basis.
S Ranganathan, Head of Research at LKP securities:
FED effect coupled with a delayed start to the southwest monsoon wreaked havoc as the Nifty caved in below 15400 for the first time in the last one year.
As the street prepares for further front-loaded action by central banks in a bid to anchor spiralling inflation, its impact on consumer spending kept investors on the backfoot.
A mere glance at the stocks hitting one-year lows today is reflective of the risk-off mood on the street as only a handful of FMCG stocks displayed a green tick among front liners.
Market Close: Benchmark indices witnessed a sharp fall and ended at fresh 52-week low on June 16 amid selling across the sectors.
At close, the Sensex was down 1,045.60 points or 1.99% at 51,495.79, and the Nifty was down 331.60 points or 2.11% at 15,360.60. About 607 shares have advanced, 2680 shares declined, and 97 shares are unchanged.
Hindalco Industries, Tata Steel, Coal India, Tata Motors and ONGC were among the top Nifty losers, while gainers were HUL, Nestle India and Britannia Industries.
All the sectoral indices ended in the red with metal index fell over 5 percent.
BSE midcap and smallcap indices shed over 2 percent each.
Devarsh Vakil, Deputy Head, Retail Research, HDFC Securities
Tops and Bottoms are for fools and liars. We do not attempt to predict the exact levels. For investors who are not fully invested or who have raised cash in the recent past by booking profits, these times provide an opportunity to gradually raise equity portion of their portfolio. While shortlisting investable stocks one will have to be careful of not having exposure to sectors or stocks that have been derated due to very high valuations or very high profit forecasts that seem difficult to achieve.
Also stocks need to be examined closely for sustainability of earnings. Nobody can catch a bottom and hence it is necessary to begin this process and achieve an attractive entry point by averaging on the downside.
Kunal Valia, Chief Investment Officer – Listed Investments, Waterfield Advisors
75bps fed hike sound byte is just ripping through bonds in the US and ofcourse it’s spilling over to Equities. Europe, closing asset purchase program or ending QE coupled with likely rate hike is impacting yields in main markets like Germany, france denting peripheral markets even harder.
Bank of England under pressure to aggressively raise rates
The Bank of England is under pressure to raise interest rates more aggressively, amid concerns that the quarter-point hike scheduled on Thursday will be insufficient to counteract price increases.
Oil prices fall
Oil prices erased early gains to head lower on Thursday, a day after a fall triggered by a U.S. interest rate hike, though tight supply limited losses.
Brent crude futures were down 45 cents, or 0.4%, to $118.06 a barrel by 0906 GMT while U.S. West Texas Intermediate (WTI) crude futures fell 44 cents to $114.87, also off 0.4%.
Both contracts broadly stayed within the previous session’s range.
Prices slipped more than 2% overnight after the Federal Reserve raised its key interest rate by 0.75%, the biggest hike since 1994.
Sensex, Nifty at fresh 52-week low: 8 factors dragging the market
The market breadth was largely in favour of bears as about seven shares declined for every rising share on the NSE.
BSE Oil & Gas index slipped 2 percent dragged by the Gujarat Gas, ONGC, Gail India
ED attaches assets worth Rs 17.7 crore in alleged Rs 804 crore fraud against SBI and BoB
Enforcement Directorate has attached assets worth Rs 17.7 crore in alleged Rs 804 crore fraud against SBI and BoB. The assets of M/S ABC Cotspin and related entities attached based on case filed by CBI, reported CNBC-TV18.
Bank Of Baroda was quoting at Rs 98.00, down Rs 1.95, or 1.95 percent and State Bank of India was quoting at Rs 443.60, down Rs 7.90, or 1.75 percent.
Market at 3 PMBenchmark indices were trading near the day’s low with Nifty below 15400.The Sensex was down 957.08 points or 1.82% at 51584.31, and the Nifty was down 308.20 points or 1.96% at 15384. About 537 shares have advanced, 2626 shares declined, and 82 shares are unchanged.
Radhika Rao, Senior Economist | DBS Bank
Overnight rate action underscored US Fed’s keenness to bring forward policy adjustments and our inhouse call is for the policy rate to be at 3.5% by end of the year. An aggressive US hike cycle puts considerable pressure on the Asian central banks to follow suit, as their policy dashboard broadens from being focused on domestic growth and inflation path, to also include financial stability and outflow risks.
The need to anchor domestic inflationary expectations and to preserve financial market stability, are likely to nudge regional central banks to undertake timely and frontloaded action even if they don’t seek to match the quantum or pace of the US hike cycle.