Sensex, Nifty50 end the first week of 2023 in the red – IT, financial services amongst top losers

• Sensex and Nifty50 closed the first week of the year on a negative note with a 1.4-1.6% decline.
• Markets remained volatile this week in anticipation of the US Fed minutes. Strong jobs data in the US also triggered fresh concerns of further rate hikes.
• On Friday, the 30-stock index Sensex closed 452 points or 0.75% lower, falling below the 60,000 mark at 59,900.
• Besides, investors are also awaiting December quarter earnings seasons to kick off next week with TCS being the first major company to release its results on January 9.

India’s benchmark indices Sensex and Nifty50 closed the first week of the year on a negative note with a decline of 1.4-1.6% amid mixed cues from global markets and sharp FII selling ahead of earnings season.

On Friday, the 30-stock Sensex closed 452 points or 0.75% lower, falling below the 60,000 mark to settle at 59,900. Meanwhile, the 30-stock index Nifty50 was down 132 points or 0.74% at 17,859.

Earlier yesterday, Sensex fell 0.5% lower to close at 60,353, while the Nifty50 index fell below the 18,000 level to close 0.28% lower at 17,992.

Markets remained volatile this week in anticipation of the US Fed minutes. Strong jobs data in the US also triggered fresh concerns of further rate hikes.

"Investor risk sentiment took a blow post the release of the FOMC meeting minutes, which indicated further rate hikes in 2023 to tame inflation. The market already remains sensitive to FIIs selling and IT stocks traded with deep cuts ahead of the release of corporate earnings next week as the growth is anticipated to be muted,” said Vinod Nair, head of research at Geojit Financial Services.

Markets lean lower ahead of earnings season, heavy FII selling
Besides, investors are also awaiting December quarter earnings seasons to kick off next week with TCS being the first major company to release its results on January 9.

Ahead of the earnings season kicking off, IT company stocks have also slipped sharply in the last one week with Nifty IT down 2.32% during the period.

On Friday as well, losses in shares of top IT companies such as TCS, Infosys, Tech Mahindra, Wipro and HCL Technologies pulled the indices lower.

Meanwhile, foreign institutional investors (FIIs) offloaded nearly ₹5,000 crore in just the first four trading sessions – continuing the selling trend seen in December – as they chase undervalued assets elsewhere.

FIIs have been selling Indian equities for ten consecutive sessions, pulling out liquidity from the market, analysts said.

Brent crude oil prices edged up to $79 per barrel after hovering around $78 yesterday. Rupee closed 9 paise lower against the US dollar at 82.71.

US markets plunge on strong labour data
Key US indices plunged on Thursday on account of strong labour data, triggering concerns of further rate hikes by the US Fed.

The benchmark S&P 500 index fell 1.16%, while the Dow Jones Industrial Average declined 1.02%. The tech-heavy Nasdaq fell the most at 1.47%.

On the other hand, Asian markets were largely positive on Friday, led by South Korea’s KOSPI which gained 1.12%, Nikkei 225 which was up 0.59% and Shanghai Composite gained 0.08%. Meanwhile, the Hang Seng index was down 0.29%.

SEE ALSO: Bank earnings could see a further ramp up in Q3, say analysts
Paytm, Mphasis downgraded to midcap while Bikaji Foods, KFin Tech make smallcap entry: AMFI
December quarter likely to be a weak one for the IT sector – Infosys amongst top analyst picks