Daily Market Commentary - August 22, 2022 - Bonanza Portfolio

Mr. Vishal Wagh, Research Head, BONANZA PORTFOLIO LTD

Indian indices opened lower today with the Nifty below 17700 amid weak global cues. At the time of closing, the Sensex was down 872.28 points or 1.46% at 58773.87, and the Nifty was down 267.80 points or 1.51% at 17490.70.

During the day, India's foreign exchange reserves fell $2.238 billion to $570.74 billion in the week ended August 12. The fall in the reserves was on account of a decline in the Foreign Currency Assets (FCA), a major component of the overall reserves. Central Bank of India, the only public sector lender under the RBI's prompt corrective action (PCA) framework, may see an exit from restrictions soon following an improvement in its financial health. The government has said there is "no consideration" for levying charges on transactions carried out through the Unified Payments Interface (UPI).

According to economists in a poll, the US Federal Reserve will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries. Inflation eased last month, driving Fed funds futures to narrowly switch their pricing to a 50 basis point hike in September after 75 bps move in June and July. The U.S. dollar index hit a fresh five-week high after another Federal Reserve official flagged the likelihood of continued aggressive monetary tightening ahead of the central banks.

After turning net buyers last month, foreign investors have shown tremendous enthusiasm for Indian equities and have infused close to Rs. 44,500 cr. in August so far amid softening of inflation in the US and the falling dollar index. Gold prices fell for a sixth straight session to hit their lowest in more than three weeks. RBL Bank hiked lending rates by 10-15 bps across tenures and IndusInd Bank hiked lending rates by 10-20 bps across tenures. On the sectoral front, all the sectors end in red.

Nifty 50 top gainers are Tata Consumers, Coal India, ITC, Britannia & Nestle India. While Tata Steel, Tata Motors, Adani Ports, Asian paints & Divis Lab were among the top losers.

Source : Equity Bulls

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