Fears of a recession in developed economies and aggressive policy tightening by major central banks caused the Indian equities markets to lose ground for a second consecutive week this month.
Last week, the US Federal Reserve raised the fed funds rate by 50 basis points to 4.25%-4.5%, raising borrowing costs to the highest level since 2007. On similar lines, to combat multi-decade high inflation, the Bank of England also raised interest rates by 50 basis points to 3.5%, bringing borrowing costs to the highest level since 2008.
On the other hand, European Central Bank (ECB) increased interest rates by 50 basis points in its final monetary policy meeting of the year, it was the fourth rate hike in a row after two consecutive 75-basis-point increases.
The BSE Sensex and Nifty opened the week with gains of 0.56% and 0.60% respectively, in the first two trading sessions. However, after the US Fed raised interest rates, those gains started to fade.
In the last week, the BSE Sensex lost 843.86 points, or 1.36%, to close at 61,337, while the Nifty50 lost 227 points, or 1.23%, to finish the week at 18,269. The BSE small-cap index fell 0.14% during the same period, while the BSE midcap index closed 1.37% lower.
The crude oil prices on the other hand gained marginally last week. Brent crude futures gained 3.86% to $79.04 a barrel, while WTI crude futures inched up 4.60% to $74.29 a barrel last week.
OPEC and the International Energy Agency (IEA) both forecast a rebound in demand over the course of next year, and U.S. rate hikes are expected to ease alongside slowing inflation, Business Standard reported, quoting Reuters.
OPEC said it expects oil demand to grow by 2.25 million barrels per day (bpd) over the next year to 101.8 million (bpd), with potential upside from China, the world's top importer.
The IEA, seeing Chinese oil demand recovering next year after a 400,000 bpd contraction in 2022, raised its 2023 oil demand growth estimate to 1.7 million bpd for a total of 101.6 million bpd, according to the report.
Meanwhile, five stocks in the Nifty 500 index returned between 15 and 77% last week. Fertilizers and Chemicals Travancore Ltd. led the Nifty 500 Index gainers, gaining close to 70%. During Friday's intraday trade, the stock ended at ₹268.55 per share, hitting the upper circuit limit of 20% after a 19.94% gain in the prior trading session.
The rally in the stock began following Russia's imposition of an export tax on fertiliser, which is likely to come into effect on January 1, 2023, as per media reports.
Indian Overseas Bank was the second top gainer in the Nifty 500 index last week. During Friday's intra-day, the stock jumped 5.61% to hit a new 52-week high of ₹36.7 apiece, the stock recorded a trading volume of 253.3 million shares, both on the NSE and BSE.
In the last week, the stock climbed from ₹26.20 apiece to ₹33.40, delivering a return of 27.48%.
General Insurance Corporation of India was another big mover in the last week. The stock has corrected by almost 5.90% on Friday's trade, yet it is still up by 17.4% during the week.
Similarly, EPL stock rose 16.5% last week, with the majority of the gains occurring during the previous trading session when it rose 13.86% to ₹191.05 per share. The stock returned 16.5% in the previous week.
Suzlon Energy stock jumped 15.6% in the last week. The stock has experienced significant volatility this calendar year, reaching a one-year high in January of this year and losing 55% of its value in four months to June to hit a one-year low of Rs. 5.9. The stock, however, gained traction at low levels and has since risen by 81.69% to date.
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