The Nifty and Sensex both fell more than 1% in trade on Friday. The Nifty 50 fell 1.79 per cent, or 299.40 points, to 16,383.45, while the S&P BSE Sensex fell 1.61 per cent to 54,806.05.
However, individual indices like Nifty consumer durables, Nifty IT, and Nifty metals, Nifty bank were all down 2-4% with multiple stocks hitting their 52-week lows and even trading below their 200-day moving averages.
Indian markets followed a drop in Asian peers after US stocks sank dramatically overnight on concerns that the Federal Reserve's interest rate hike this week may not be enough to combat growing inflation.
The India VIX also rose 4% to 21 levels.
What is India VIX?
It measures the market’s anticipation of volatility in the near term. During Moments of market volatility, the market typically moves sharply up or down and the volatility index tends to climb or fall.
Consumer durable stocks were trading in the negative zone, with the Nifty Consumer Durables index falling 481 points, or 1.85%, at 25,486 points at 12:00 IST.
India’s consumer durable market has been hit with the supply of components stuck for goods ranging from television panels to refrigerators and washing machines, as containers pile up at Shanghai port due to China's "no COVID policy".
Nearly 25–75 per cent of white goods’ components come from China. Air conditioners are the most dependent, with nearly 75 per cent of components imported from China, Business Standard reported.
Among individual stocks, Voltas Ltd (down 6.9%), Rajesh Exports (down 2.68%), Crompton Greaves (down -1.75%) and Havells India (down 0.98%), were the top losers in the pack. Meanwhile, Vaibhav Global is trading in the green, it is up by 2.6 per cent, trading at ₹430.35.
IT stocks were also trading lower in Friday's trade. The nifty IT Index was down about 854.60 points, or 2.69%, at 30586.85 points.
The IT sector has been battling with high attrition as demand for digital talent continues to outpace supply. The ‘Great Resignation’ was the term coined a few months ago when employees, mainly in the tech and startup sectors, were flooded with offers, joining bonuses, and counteroffers. Industry experts, however, predict that the situation will ease shortly, possibly over the next six months.
Among the components of the Nifty IT Index, Coforage (down 8.37%), Mindtree (down 4.43%), L & T Tech (down 3.05%), Mphasis (down 2.01), and Wipro (down 3.64), were the top losers in the IT Index. Among other losers, Infosys (down 2.99%), HCL Tech (down 2.77%).
In addition, the Nifty Metal Index was down about 186.30 points, or 3.00%, at 5982.60. Vedanta remained the top loser in the index, down by 10.62%, trading around ₹359. The other losers were Jindal stainless (down 4.27%), APL Apollo Tubes (down 4.94%), Hindalco (down 4.68%), and SAIL (down 4.46%).
Metal stocks are facing input cost pressure from the coal shortage. Coking coal prices have skyrocketed. Australian coking coal on the Singapore Exchange has risen in recent months, reaching a record high of $635 a tonne on March 10.
Moreover, the supply of coal from India has been diverted to coal-based thermal power plants, which are trying to meet the peaking power demand from the manufacturing sector.
The banking sector was down about 681.05 points, or 1.91%, at 34558.85 points. Au Small Finance Bank (down 3.93%), Axis Bank (down 3.54%), Federal Bank (down 2.28), HDFC Bank (down 2.17%), IndusInd Bank (down 2.12), ICICI Bank (down 1.68%), and Bank of Baroda (down 1.56%), were the top losers in the Index.
In their latest report, India Ratings and Research said that the RBI's surprise rate hike, which signals a reversal of the interest rate cycle, will weigh on the banking system's credit growth, which was showing signs of revival with an 11 per cent increase.