NEW DELHI: Domestic stocks took a breather on Friday, following a relentless five-day rally, after the US policymakers hinted at a Fed rate hike in March. The US stocks settled lower overnight and most Asian markets were down in morning trade. Technical charts for domestic indices too were showing fatigue at large and overbought market conditions.
“Inflation is turning out to be a major worry for markets this year. December PPI inflation in the US has spiked to a record 9.7 per cent. Inflation in the euro zone is already at record highs. If inflationary expectations get entrenched, the Fed will have to act early, perhaps in March itself. ECB too is likely to follow suit,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
At 9.40 am, the BSE Sensex was trading 419.22 points or 0.68 per cent lower at 60,816.08. The NSE Nifty fell 121.35 points or 0.66 per cent to 18,136.45. The selling was broad-based with 28 of 30 Sensex stocks trading lower. In the broader market though three stocks rose for every two that fell.
Among Sensex stocks, HCL Tech tanked 2.49 per cent to Rs 1,300 ahead of its third quarter results later in the day. Asian Paints and HDFC fell over 2 per cent each. Axis Bank, Wipro, Hindustan Unilever and Tech Mahindra declined 1-2 per cent. ICICI Bank, Kotak Bank, SBI, TCS and Infosys fell up to 1 per cent.
“Since retail investors are now a force to reckon with, whether in the US or India, their response to market corrections on rate hike expectations will be crucial,” Vijayakumar said.
Mindtree shares plunged 5 per cent to Rs 4,507.45 following Q3 numbers. Nomura India has maintained a ‘neutral’ stance on Mindtree with a target of Rs 4,744 as deal wins continue to stay sluggish. Growth was made up by small projects, it said adding that margin outperformance was the key highlight in Q3 results.
Tata Steel edged 0.11 per cent higher to Rs 1,221.90. JPMorgan noted that the domestic steel demand is seasonally strong in the March and June quarters and maintained buy on Tata Steel with a target of Rs 1,850
Other than HCL Technologies, Tinplate Company of India, Onward Technologies, Swasti Vinayaka Synthetics, Indokem, International Travel House and Gujarat Hotels are among the companies that will announce their December quarter results today.
