Frontline indices the Sensex and the Nifty fell for the second consecutive session on September 22 amid weak global cues after the Fed rate hike.
Equity barometer the Sensex opened 383 points lower at 59,073.84 and swung 625 points in intraday trade between the high and low of 59,457.58 and 58,832.78 respectively.
The index closed with a loss of 337 points, or 0.57%, at 59,119.72 while the Nifty ended 89 points, or 0.50%, lower at 17,629.80.
Mid and smallcaps, however, bucked the trend and ended higher. The BSE Midcap index closed with a gain of 0.32% while the smallcap index rose 0.47%.
The US Fed lifted rates by 75 basis points on expected lines and hinted that the policy rate would rise by 4.4% by the end of the year and would reach an upper limit at 4.6% by the end of 2023.
As per a Reuters report, "the Fed's target policy rate is now at its highest level since 2008 - and new projections show it rising to the 4.25%-4.50% range by the end of this year and ending 2023 at 4.50%-4.75%."
Analysts earlier believes that the Fed may cut rates by some points in 2023 but the fresh estimates of rate hikes are steeper and longer than the market expectations.
Fed hike pushed the dollar higher and the rupee plunged to a record low level.
The rupee plunged 89 paise to a record low of 80.87 per dollar. Crude oil prices remained low as Brent Crude traded near the $90 a barrel mark.
"Fed turned more hawkish than anticipated increasing its rate forecast to 4.4% by the end of 2022. The indication is that 125bps more rate hikes can be expected in the next two policy meetings scheduled this year. Following this, the US dollar index rose above 111, depreciating the Indian rupee to beyond 80," Vinod Nair, Head of Research at Geojit Financial Services pointed out.
"Indian stock market was able to sustain its resilience with limited cuts but if the rupee continues its weakness, the domestic market would turn less attractive for foreign investors in the short-term, affecting performance," said Nair.
Shares of Titan, Hindustan Unilever, Asian Paints, Maruti and ITC ended as the top gainers in the Sensex index. On the flip side, Power Grid, HDFC Bank, Axis Bank, HDFC and Bajaj Finserv ended as top laggard stocks in the Sensex kitty.
Banks and financials suffered the most. The BSE Bankex index lost 1.44%, ending as the top sectoral loser, followed by the Financial Services index which ended 1.22% lower.
FMCG (up 1.32%), Consumer Durables (up 0.96%), Consumer Discretionary (up 0.89%) and Auto (up 0.73%) indices clocked healthy gains.
"The Nifty formed a lower top formation on the daily and intraday charts and closed below the 20-day SMA (simple moving average), indicating a continuation of weakness in the near future," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities observed.
"The index has been consistently facing resistance at higher levels and at the same time regularly taking support near the 17,500 level. For the traders, 17,500 and 17,700 would be the important level to watch out for and below 17,500, the index could slip to 17,400-17,350 levels. On the flip side, a range breakout over 17,700 could push the index up to 17,800-17,850,” said Chouhan.
Palak Kothari, Senior Technical Analyst at Choice Broking pointed out that the Nifty has been trading with lower high and lower low formations for the last three trading sessions.
The index formed a Doji candle on a daily chart which points out the confusion between buyers and sellers. Nifty has been facing resistance from 21 DMA (daily moving average) as well as the middle band of Bollinger which adds bearishness to the prices.
"On the open interest (OI) data, the highest Call OI was witnessed at 17,800 strike while on the put side, it was at 17,500 level. The daily momentum indicator MACD was trading with a negative crossover which points out the weakness in the counter. Nifty may find support around 17,500 while a breach below this level will open the gate for 17,380-17,200 levels," said Kothari.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.