BackMarkets end lower ahead of Fed's policy meet; Sensex breaths over 62,100, Nifty 50 closes flat
On Monday, the Sensex dropped by more than 500 points and the Nifty 50 dipped over 150 points before correcting to end broadly flat. Smallcap stocks outperformed, while metal stocks witnessed major buying.
PremiumContinued selling in IT stocks weighed on Indian markets pushing Sensex and Nifty 50 for a bearish start in the current week. On Monday, the Sensex dropped by more than 500 points and the Nifty 50 dipped over 150 points before correcting to end broadly flat. Smallcap stocks outperformed, while metal stocks witnessed major buying. A retreat in Asian counterparts ahead of the US Federal Reserve's policy outcomes and inflation data further dampened sentiment. Indian rupee too weakened tracking a drop in Asian currencies as the dollar picked up momentum.
Sensex extended its second consecutive day drop on Monday. The 30-scrip benchmark closed at 62,130.57 lower by 51.10 points or 0.08%. The benchmark had dipped below the 61,700 mark during trading hours. IT stocks continued to perform lower, while a heavy selloff in consumer durables also dragged the performance of Sensex.
Stocks like Tata Steel, Nestle India, and Dr. Reddy's Lab were top gainers. While Asian Paint, Infosys, Titan, and Kotak Bank were top bears.
Meanwhile, after plunging to the day's low of 18,345.70, Nifty 50 recovered early losses to close at 18,497.15 flat compared to the previous closing. Strong buying in PSU Banks, oil & gas, and realty stocks offset the losses.
After debuting on a muted note, Uniparts India settled at ₹539.55 apiece lower by 6.17% from its listing price of ₹575 apiece on BSE. The company launched its ₹836 crore IPO from November 30 to December 2nd and received an oversubscription of 25.32 times.
Vinod Nair, Head of Research at Geojit Financial said, "A tepid start-off in the domestic market was flattened due to a recovery in banking, metals, and oil & gas, while continued selling in IT stocks weighed on the indices. Key inflation numbers are expected to soften from the previous month, owing to a moderation in food prices. Extending the stock market route, the global markets remained fragile as rate decisions by major central banks took centre stage."
At the interbank forex market, the Indian rupee dipped 0.32% to 82.5350 against US dollar. In the trading session, the local unit did move closer to its 82.75 level. On Monday, the majority of Asian currencies weakened as the greenback gained momentum on expectations of a stronger-than-expected U.S. producer prices data --- which could indicate that the Fed's interest rate may remain elevated.
Major economies such as the US, the UK, and India will release their inflation data for November month this week. Also, India will present IIP and WPI inflation data in the current week.
The FOMC is set to begin its December policy meeting from Tuesday to Wednesday. The majority are hoping for a 50 basis points hike instead of a fifth 75 basis points hike this fiscal, however, US inflation data which will be released tomorrow will provide further clarity on the key fund rates outcome.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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