The BSE Sensex closed at 60,836.41, down 69.68 points or 0.11% from the previous close. The Nifty declined 0.17% or 30.15 points to end at 18,052.70 after losing more than 100 points at market opening. Both indices oscillated between gains and losses for most of the session with the Nifty briefly slipping below 18,000 in early trade.
Barring Hong Kong, major Asian shares also showed resilience amid the latest Fed hike. Japan’s Nikkei 225 ended flat. China’s Shanghai Composite fell 0.2%, while South Korea’s Kospi ended down 0.33%. Thailand and Indonesia ended higher.
European and US shares recovered more than half their losses from their respective low points during Thursday’s session. The FTSE 100 saw a sharp rise and ended in positive territory after the Bank of England raised key lending rates by 75 bps to 3% as the UK looks to fight inflation that has led to the cost of living crisis. The British pound fell 2% after the rate hike decision.
DIIs Net Sellers
In US, Dow Jones, S&P 500 and Nasdaq were down 0.1-1% at the time of going to press.
Brokers said the absence of foreign portfolio selling of late has partly helped Indian markets withstand the continued hawkish stance of the Fed.
“The resilience in Indian markets is more or less in line with what has been happening so far,” said Hemang Jani, head, equity strategy, broking and distribution,
. “More recently, foreign investors have covered their short F&O (futures and options) positions and gone long. I am not confident if the indices will go up in a big way from here on but there is a lot of buy-on-dips happening.”
Foreign portfolio investors (FPIs) net bought Indian shares worth ₹677.62 crore on Thursday, a smaller quantum compared with recent purchases, showed provisional data from the stock exchanges. Their domestic counterparts were net sellers to the tune of ₹732.11 crore.
In the past nine sessions, including Thursday’s provisional data, FPIs have purchased shares worth nearly ₹23,000 crore, while domestic institutional investors (DIIs) have net sold shares worth ₹6,141 crore in the past few sessions, including Thursday’s provisional data.
The Fed raised interest rates by 75 basis points on Wednesday and signalled that smaller rate hikes may be in the offing, sending US markets higher soon after the policy announcement. However, Wall Street gave up early gains and sank after Powell said it was “very premature” to be considering the pausing of rate hikes.
“Don’t fight the Fed,” said David Lundgren, portfolio manager of a private long/short equity hedge fund and chief market strategist at Boston-based MOTR Capital Management & Research, Inc. “The Fed has been telling us over and over again that it is not pivoting. They want to control inflation no matter what it takes. Investors are denying and refusing to believe what the US Fed is saying.”
“The underlying condition of global equities markets is perhaps as bad as it was prior to the global financial crisis. This market is not in a position to handle bad news,” he said.
Of the 30 Sensex companies, 15 ended in the red, led by declines in technology and utilities stocks.
was the biggest loser, down 2.66%. ,
, and were among the other top five losers in the Sensex. (1.89%) and (1.43%) were among the top gainers.
