Sensex, Nifty50 edge lower amid volatility: IT stocks drag, HAL tumbles 5%

• India’s benchmark indices Sensex and Nifty50 edged lower in morning trade on Thursday amid volatility following a 25 basis point rate hike by the US Fed’s Federal Open Market Committee (FOMC).
  
• IT stocks emerged as the top drags, while Hindustan Aeronautics fell 5%.
  
• US-based short seller Hindenburg Research announced that another report is coming soon.
  

India’s benchmark indices Sensex and Nifty50 edged lower in morning trade on Thursday amid volatility following a 25 basis point rate hike by the US Fed’s Federal Open Market Committee (FOMC). IT stocks emerged as the top drags, while Hindustan Aeronautics fell 5%.

SGX Nifty, an early indicator of how the markets may perform, was down 0.11% or 19 points early in the morning.

Earlier on Wednesday, both the benchmark indices closed on a positive note ahead of the FOMC outcome. While Sensex gained 0.24% to close at 58,215 points, Nifty50 gained 0.26% to close at 17,152 points.

US-based short seller Hindenburg Research announced that another report is coming soon but did not specify the company in its crosshairs this time around. Hindenburg grabbed the limelight this year after its report targeting the Adani group wiped out over INR 11.5 lakh crore in the Gautam Adani-led conglomerate’s market capitalisation.

Top gainers and losers on Nifty50


Source: NSE, as on March 23, 2023

US Fed’s FOMC announces 25 basis point rate hike

On Wednesday late night, the US Fed’s FOMC announced a 25 basis point rate hike even as there were growing expectations for a pause due to the banking sector crisis in the US. The FOMC also raised its rate target range to 4.75-5%, a level that was previously only seen before the 2007-08 global financial crisis.

Brokerages expect the Reserve Bank of India’s Monetary Policy Committee (MPC) to stick to a 25 bps rate hike in April on account of elevated inflation. Now with the FOMC announcing its hike, MPC’s hike becomes more certain.

US markets tumble, Asian markets mixed

Reacting to the rate hike, equity markets in the US tumbled with Dow Jones falling 1.63%, while S&P 500 fell 1.65%. The tech-heavy Nasdaq declined 1.6%.

Markets in Asia were mixed – Hang Seng led with gains of 1.7%, followed closely by Taiwan Weighted which was up 1.57%. Shanghai Composite was up by a more modest 0.31%. However, KOSPI fell 0.43%, while Nikkei 225 was down by 0.51%.

Crude oil prices remained under pressure, with Brent crude falling 0.81% on Thursday morning to $76 per barrel. Gold prices edged up 0.31% to INR 58,760 per 10 grams.

Stocks to watch

Hindustan Aeronautics: The government will sell up to 3.5% stake in the aerospace and defence company through an offer for sale (OFS) that will open on March 23 and will close on March 24. Reports say the government aims to raise more than ₹2,867 crore through this transaction.

Hero MotoCorp: The two wheeler maker said it will increase the prices of some of its motorcycles and scooters by around 2% from April 1 while the exact quantum of increase will vary by specific models.

Reliance Industries: Reliance Retail’s FMCG arm Reliance Consumer Products announced the launch of home and personal care products range in an expansion to its FMCG portfolio. The product line includes Glimmer beauty soaps, Get Real natural soaps, Puric hygiene soaps and so on.

Nazara Technologies: The gaming and sports media platform’s subsidiary Sportskeeda has acquired 73.27% stake in Pro Football Network LLC for $1.817 million. The company reserves an option to acquire up to 10% and up to 8% additional stock of the Pro Football Network in CY 2024 and CY 2025 respectively.

Global Surfaces: The natural stone processor company is all set to go public on exchanges today on March 23. The grey market premium of the company indicates a positive opening with a premium of ₹15 per share.

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