The Nifty Midcap 100 index fell 1.6% to close at 32,010. On Wednesday, the index made a new 52-week high of 32,939.30 and came within 1% of its all-time high of 33,243.50 seen on October 19 last year. The Smallcap 100 index fell 0.63% amid thinning investor participation. Across share categories on the BSE, losers outnumbered gains in the ratio 2213: 1344. The Sensex and Nifty fell close to 0.8% each.
“The breadth remains weak and there is no significant buying interest in the mid-cap space and broader markets,” said Abhilash Pagaria, head, alternative and quantitative research, Nuvama Institutional Equities. “We do not see much upside for the Nifty beyond 18900 levels with support at 18050-18100 levels, which should be used to add short-term long bets with 17,920 as stop loss.”
Hawkish commentary by the US and European central banks has rattled investor confidence towards risk assets. Investors took money off the table ahead of the upcoming festive holiday season that may see a drop in volume and overall market activity, analysts said.
“The bullish enthusiasm with which the December series started has fizzled out and markets will remain under pressure in the near term due to the recent commentary of global central banks,” said Pagaria.
Foreign portfolio inventors (FPIs) sold Indian shares worth a net ₹1,975.44 crore on Friday, showed provisional data from the stock exchanges.
“Indian markets will continue to dance to global cues and the next two-three months will remain volatile,” said Mayuresh Joshi, head equity research, William O’Neil India. “The hawkish tone of global central banks indicates that they have been behind the curve in fighting inflation.”
On Friday, Asian stocks ended mixed, while key European averages were down 0.4-1.3%. The Stoxx Europe 600, a pan-European gauge, was down 1% at press time.
On Thursday, the ECB said “significant” further rate rises at a “steady pace” were still to come, sending European stocks lower.
This was followed by the US Federal Reserve’s 50-basis point hike in benchmark rates on Wednesday, taking them to their highest level in 15 years. Fed Chair Jerome Powell said the US central bank would continue to raise rates through 2023 to 5.1%, a rate higher than previously expected.
Joshi said central banks will continue to tighten liquidity at the expense of stifling demand and economic growth, and that’s bad news for the overall job market, consumer spending, and economic growth which is already slowing down.
