Domestic benchmark indices after opening lower in Friday’s trade, extended their losses during the day, bringing the eight-session-long bull run to a halt. Profit booking at higher levels and weak global market cues drove the indices lower, with losses seen largely in index heavyweight RIL and bank stocks.
Investors will be keenly watching the U.S. non-farm payrolls data, scheduled to be released later today and is likely to show job growth was the smallest in nearly two years in November.
BSE Sensex settled 416 points or 0.66% lower at 62,868.50 while Nifty ended at 18,696.10, lower by 116 points or 0.62%.
“Investors are booking some profits after the recent run-up. At higher valuations, there is a shift happening from expensive stocks to value stocks,” said Anita Gandhi, director at Arihant Capital Markets told Reuters.
Among Sensex stocks,
, , TCS, , and were the top losers, falling around 1-2%. , , HUL, , L&T and M&M also opened lower.
On the other hand
, , Dr Reddy’s Lab, , , and opened with gains.
Sectorally, Nifty Auto fell 0.63% while Nifty Financial Services declined 0.55%. Nifty FMCG and Nifty Bank also opened lower. Whereas, in the broader market, Nifty Midcap50 increased 0.08% while Smallcap50 advanced 0.18%.
“A major market positive that has helped equity markets globally during the last several days has been the steady decline in the dollar index and US bond yields. This trend continues. The dollar index is now below 105 and the US 10- year bond yield is around 3.43%,” V K Vijayakumar, Chief Investment Strategist at
said.
“Another important data is the declining manufacturing activity in the US in November. This negative economic news is paradoxically positive news from the market perspective since it indicates that the US economy is responding to the monetary tightening by the Fed. So, US inflation is likely to decline further enabling the Fed to slow down rate increases and perhaps pause in Q1 of 2023. This is market positive,” Vijayakumar added.
Data on Thursday, showing falling U.S. job openings and contracting U.S. manufacturing activity, bolstered expectations that the central bank will slow the pace of interest rate hikes as soon as its December policy meeting.
Market participants also expect the Reserve Bank of India to follow suit and raise interest rates by a smaller 35 basis points next week, according to economists polled by Reuters.
US Stocks ended mixed on Thursday after an uneven day of trading and bond yields plunged broadly. Dow Jones dropped 0.56%, S&P 500 fell .09% while Nasdaq surged 0.13%.
In early trade in Asian markets, Japan’s Nikkei 225 decreased 1.83%, South Korea’s Kospi fell 1.45% and China’s Shanghai Composite declined 0.34%.
(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
