Rising Inflation Spooks Market Sentiments

Rising Inflation Spooks Market Sentiments.

Nifty closed at 17014 before touching 16957.

On Thursday, benchmark indices fell because of rising inflation and concerns about interest rate hikes. Today, a weak rupee and rising crude oil price also influenced the market sentiments.

According to the most recent economic news, increased food costs propelled retail inflation to a five-month high of 7.4%, while the factory output declined for the first time in the last 18 months.

This is the second month in a row that consumer price index (CPI)-based inflation has risen, putting pressure on the Reserve Bank of India (RBI) to increase the interest rates further to manage inflation.

The Nifty 50 index declined 109.25 points, or 0.64 percent, to 17,014.35. Today’s market saw a wave of selling in banking, financial, and capital goods stocks.

Foreign institutional investors (FIIs) continued to be net sellers, and the Rupee fell 6 paise to settle at 82.39 against the US dollar. The Nifty made a lower high and lower low compared to the previous closing values.

The advance-decline ratio was 0.48 today, while market breadth was negative. The volatility index India Vix, on the other hand, gained 0.57 percent to settle at 20.29.

DAILY MARKET ACTION
Advancers – 715
Decliners – 1492
52Wk High – 36
52Wk Low – 43
High Band Hitters – 54
Low Band Hitters – 49
200d SMA – 16984
50d SMA – 17485
20d SMA – 17274

Top Gainers and Losers

The top gainers were HCL Technologies (+3.05%), Sun Pharmaceutical (+1.30%), Coal India (+0.84%), Dr. Reddy (+0.66%), and Tata Motors (+0.62%),.

The top losers were Wipro (-6.95%), Adani Ports (-2.29%), SBIN (+2.23%), SBI Life (-2.08%), and ICICI Bank (-1.65%).

Wipro was the biggest loser in the Nifty 50, falling about 7%, followed by Adani Ports, SBI, SBI Life, and ICICI Bank. HCL Tech, Sun Pharma, Coal India, Dr Reddy’s, and Tata Motors, on the other side, were the top gainers today.

Sectors & Broader Indices

The top gainers were Media (+0.27%), Pharma (+0.22%), and Metal (+0.11%). The top losers were Financial Services (-1.22%), Realty (-0.99%), Consumer Durables (+0.80%), IT (-0.68%), and FMCG (-0.37%).

The Nifty Financial Services, Realty, and Consumer Durables were the top losers today. Furthermore, Nifty Media, Pharma, and Metal were the gainers, all of which registered modest advances.

Furthermore, the broader indices followed the benchmarks. The Nifty Midcap 50 was down 0.93 percent, while the Nifty Small cap 50 fell 0.59 percent.

SECTORS – NOTABLE ACTION
MEDIA +0.27%
PHARMA +0.22%
METAL +0.11%
FINANCIAL SERVICES -1.22%
REALTY -0.99%
CONSUMER DURABLES -0.80%

Daily Pivots

Rising inflation is a key issue around the world, and we expect volatility to remain high. Tomorrow’s Nifty trading range is 16940 to 17100.

The market has been moving in a box range of 16800 to 17400 for the last 15 trading sessions, causing a lot of volatility. The closing price of the Nifty 50 is below the 20-day and 50-day moving averages, but slightly above the 200-day moving average, signalling bearishness in the future trading sessions.

The CPI in India is higher than expected, and the CPI in the US has also remained high. We expect interest rates to rise in India by 0.40 to 0.50 percent at the next MPC meeting, and 0.50 to 0.75 percent rate hike by the US Fed at its next meeting on November 2, 2022.

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This article is only for educational purposes and is not an investment advice.