Domestic benchmark indices edged lower on Friday, after strong US data indicated the Federal Reserve would have to keep hiking interest rates, and ahead of the start of the December quarter earnings season. Apart from this, consistent selling by foreign investors and a spike in crude oil prices also kept investors on edge.
BSE Sensex was trading at 59,716, down 636 points or 1.05% around 13.05 pm while Nifty50 was at 17,802, down 188 points or 1.04% at the same time. Both indices are trading lower for the third day and set to end first week of 2023 nearly 2% lower.
Most of the major sectoral indexes logged losses. Twenty-five of the Nifty 50 constituents fell, with information technology stocks declining ahead of the third quarter earnings season, set to begin on Monday.
In the broader market, Nifty Midcap50 dropped 0.98% and Smallcap50 fell 1.01%.
“The major drag on the market now is the sustained selling by FIIs. FIIs sold for the 10th consecutive day yesterday taking the cumulative selling to Rs 11,400 crore. The underperformers of last year like China and Europe are doing well. Clearly, FII money is chasing lower valuations by selling in overvalued markets like India. This trend might continue imparting weakness in the Indian market,” V K Vijayakumar, Chief Investment Strategist at
Prashanth Tapse, Senior VP (Research) at Mehta Equities said, technically, for Nifty the immediate aggressive downside risk is seen at 17,771 mark and then aggressive targets at 17,461 mark. The index will gain strength only if it closes above its high of 18,267 mark, he said.
Wall Street’s main indexes lost more than 1% on Thursday, with Nasdaq leading the declines, as evidence of a tight labor market eroded hopes that the Federal Reserve could pause its rating hiking cycle anytime soon as it keeps focused on inflation.
The Dow Jones Industrial Average fell 339.69 points, or 1.02%, to 32,930.08, the S&P 500 lost 44.87 points, or 1.16%, to 3,808.1 and the Nasdaq Composite dropped 153.52 points, or 1.47%, to 10,305.24.
In afternoon trade, Contracts for the Euro Stoxx 50 and S&P 500 gained after the US index fell 1.2% Thursday. Shares in Japan, South Korea and Australia increased. Stocks in China and Hong Kong fluctuated after initially rallying on news reports Chinese officials would remove restrictions on property developer borrowing.
The Indian rupee rose 12 paise to 82.50 against the US dollar in early trade on Friday. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, increased 0.01% to 105.04 level.
Oil prices rose around 1% on Friday, extending gains from the previous trading session after data showed lower fuel inventories following a winter storm that hit the United States at the year end.
Brent crude futures last gained 79 cents, or 1%, to $79.48 a barrel. US West Texas Intermediate crude futures were also up 80 cents, or 1.1%, at $74.47 a barrel.
(With inputs from agencies)
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