Nifty, Sensex end deep in the red with IT, private banks as top laggards

• Markets ended lower following weak cues from the US and Asian markets, which were hit after the US Fed's speech on Friday.
• Powell in his 8-minute speech at Jackson Hole touched upon economic growth amid rising inflation, which also hit the US market.
• Meanwhile, global markets went down amid rising bond yields and hawkish commentary from the US Fed.
• Nifty50 closed lower by 246 points and Sensex ended 861 points down, following sharp volatility in the US and Asian markets.
• IT, media and private banks were top laggards in today’s market session.

Equity markets that started the week on a negative note closed lower as huge sell-off was witnessed in all sectors barring FMCG and oil & gas.

Nifty50 closed lower by 246 points and Sensex ended 861 points down, following sharp volatility in the US and Asian markets. The US Fed chief Jerome Powell’s hawkish stance on tackling inflation on August 26, led to the fall in global and Indian markets.

“Domestic equities witnessed sharp decline in line with its global peers after hawkish commentary from the US Federal Reserve chair Jerome Powell. IT, media and private banks were top laggards. Volatility index, India VIX was up 8.8% at 19.82 levels,” said Siddhartha Khemka, head - retail research at Motilal Oswal Financial Services.

Global markets too went down amid rising bond yields. “Further, risk of shutdown of key flow of Russian gas supplies dented investor’s sentiments,” said Khemka.

Rupee also touched yet another all-time low of 80.13 per dollar after it shed 10 paise in today’s session.

“Global stocks fell, treasury yields climbed and global currencies lost ground against the dollar on Monday as investors took fright following hawkish comments from some of the world’s most powerful central banks. European Central Bank board member Isabel Schnabel warned over the weekend that central banks must now act forcefully to combat inflation, even if that drags their economies into recession,” Deepak Jasani, head of retail research at HDFC Securities said.

Further, analysts say near term weakness might continue because of weak global cues, crude hovering around $100 per barrel. Also, India’s Q1FY23 GDP data that is scheduled to release this week could provide some direction to the market.

Tech Mahindra remained the top loser in the markets since opening, followed by Infosys and Wipro. TCS, Tata Motors too figured in the top losers list along with Hindalco and JSW Steel. The shares of Indian IT companies were battered as the US is their biggest market.

Whipsaw movements expected, say experts
The trading week, which starts today, is expected to be jam-packed with activities.

“To begin, India’s GDP growth rate and S&P Global Manufacturing PMI will become key indicators to assess the state of the domestic economy. From a global standpoint, markets can experience whipsaw movements as investors will be closely watching the US initial jobless claims and unemployment rate,” said Apurva Sheth, head of market perspectives at Samco Securities.

Markets will remain closed on Wednesday August 31 on account of Ganesh Chaturthi which would impact some trading volumes during the week.

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