Equity indices extend losses to 3rd day; Nifty slips below 17,350 mark

Extending their decline for the third day, Indian equity benchmarks ended with heavy losses of over one and half percent on Friday, amid an overall bearish trend in global markets after the Fed announced a widely-expected rate hike and reiterated its commitment to keep up increases into 2023 to fight red-hot inflation. US Fed’s aggressive stance has increased recessionary fears on global front and created nervousness on domestic markets as well. Markets started the session on pessimistic note and extended their fall later on after ASSOCHAM said India Inc is bracing itself for yet another policy rate hike by the RBI Monetary Policy Committee in the range of 35-50 basis points as the move seems unavoidable in the wake of the global monetary tightening to limit the impact of inflation. Besides, weakening of the domestic currency makes investments into Indian securities less attractive for foreign portfolio investors (FPIs). They sold equities worth Rs 2,509 crore on Thursday, and Rs 461 crore on Wednesday. Market participants overlooked Union Finance Minister Nirmala Sitharaman’s statement that the government was making efforts to keep inflation under 4 per cent and steps were being taken to ensure people get essential goods at fair price and on time.  Meanwhile, Capital markets regulator Sebi has allowed emerging investment vehicles, Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT), to issue commercial papers.

Selling got intensified in afternoon session after Russian President Vladimir Putin signaled annexation of parts of Ukraine adding to geopolitical concerns. In last trading hour, markets touched their intraday low point as traders remained unenthusiastic amidst unpleasant economic outlook and a surging dollar. This was because of increase in policy rate by the US Fed and Bank of England, and escalation in geopolitical tensions between Russia and Ukraine.

On the global front, European markets were trading lower as preliminary estimates released showed that S&P Global's Eurozone manufacturing purchasing managers' index fell to 48.5 in September from 49.6 a month earlier. Also, the downturn in British businesses deepened this month because of soaring costs and faltering demand. The S&P Global/CIPS flash Composite Purchasing Managers' Index (PMI) fell to 48.4 from 49.6 in August. Asian markets settled lower on Friday following the broadly negative cues from global markets, amid continuing concerns about the impending recession and the global economic outlook following the recent aggressive interest rate hikes by the US Fed and other major central banks.

Back home, stocks related to telecom industry were in watch as Department of Telecommunications (DoT), Ministry of Communications, has released the draft Indian Telecommunication Bill, 2022, under which it has proposed a provision to waive off fees and penalty of telecom and internet service providers. The ministry has proposed provision for refund of fees in case a telecom or internet provider surrenders his license.

Finally, the BSE Sensex fell 1020.80 points or 1.73% to 58,098.92 and the CNX Nifty was down by 302.45 points or 1.72% to 17,327.35.

The BSE Sensex touched high and low of 59,143.32 and 57,981.95, respectively. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.28%, while Small cap index was down by 1.92%.

The top losing sectoral indices on the BSE were Utilities down by 3.48%, Power down by 3.40%, Realty down by 2.97%, Financial Services down by 2.56% and Bankex down by 2.50%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Sun Pharma up by 1.53%, Tata Steel up by 0.58% and ITC up by 0.33%. On the flip side, Power Grid Corporation down by 7.93%, Mahindra & Mahindra down by 3.00%, SBI down by 2.99%, Bajaj Finserv down by 2.80% and Bajaj Finance down by 2.73% were the top losers.

Meanwhile, IT Minister Ashwini Vaishnaw has said the government is investing nearly $30 billion to ensure last-mile network accessibility for 4G and 5G in every village across the country and build a robust digital infrastructure in the rural areas. Vaishnaw said the government has reached out to over 1.5 lakh gram panchayats to date.

He emphasized ‘We are now creating a whole ecosystem of village entrepreneurs, channelising the energies of youngsters to take good quality, high-speed data connectivity to every village in the country while making them a part of the growth journey.’ He added ‘We have tested this model and approximately 80,000 new connections are now being facilitated every month.’

He said there are three key areas in fintech for the government - building a robust digital infrastructure and a digital regulatory framework, along with social inclusion and the societal imperatives around it.

The CNX Nifty traded in a range of 17,642.15 and 17,291.65. There were 5 stocks advancing against 44 stocks declining, while 1 stock remains unchanged on the index.  

The top gainers on Nifty were Divi's Lab up by 1.95%, Sun Pharma up by 1.22%, Cipla up by 0.90%, Tata Steel up by 0.77% and ITC up by 0.57%. On the flip side, Power Grid Corporation down by 8.06%, Hindalco down by 4.03%, Apollo Hospital down by 4.01%, Adani Ports &SEZ down by 3.59% and NTPC down by 3.02%.

European markets were trading lower; UK’s FTSE 100 decreased 152.34 points or 2.13% to 7,007.18, France’s CAC decreased 129.98 points or 2.2% to 5,788.52 and Germany’s DAX decreased 303.21 points or 2.42% to 12,228.42.

Asian markets settled lower on Friday, tracking overnight losses in Wall Street on continued concerns about elevated inflation and the possibility of global recession following the US Federal Reserve's third straight 75 basis point interest rate hike on Wednesday. Chinese shares declined on growth concerns. Private report slashed its 2023 GDP growth forecast for China to 4.3 percent from 5.1 percent in light of ongoing Covid woes. Other private report downgraded its outlook for China to 4.5 percent from 5.3 percent. Meanwhile, Japanese market was closed for Autumnal Equinox holiday.