Mr. Vishal Wagh, Research Head, BONANZA PORTFOLIO LTD
Indian indices opened on a negative with the Nifty below 17,600 on the back of weak global markets after the US Federal Reserve raised interest rates by 75 basis points. At the time of closing, Sensex shed 337.06 points or 0.57% to close at 59,119.72 while Nifty shed 88.55 points or 0.50% to close at 17,629.80.
During the day, the cabinet has approved an additional Rs. 19,500 Crs funding for the production-linked incentive scheme for the manufacture of solar modules. The cabinet has also approved changes to the PLI scheme for semiconductor and display manufacturing, with the government now offering fiscal support of 50%, instead of 30% for setting up semiconductor ATMP / OSAT facilities in India. A Rs. the 76,000 Crs scheme for chip and display facilities was first announced in December 2021.
The Federal Reserve raised interest rates by 75 bps and forecasted they would reach 4.6% in 2023, stepping up their fight to curb inflation. Britain's manufacturer's association slashed its forecast for growth in factory output next year, citing huge uncertainty around demand and energy prices. The UK downgraded its forecast for manufacturing growth for next year to just 0.6%, down from the 1.7% forecast in June. The Bank of Japan maintains the policy balance rate at -0.1%. Japan intervened in the currency market to shore up the battered yen for the first time since 1998, the central bank's decision to maintain ultra-low interest rates that have been driving down the currency. The Bank of England is set to raise interest rates and start selling assets built up during a decade-long stimulus program, a historic tightening of monetary policy designed to clamp down on inflation.
IndusInd Bank hikes lending rate by 5-10 bps across tenures and RBL Bank hikes lending rates by 20 bps across tenures. The currency opened at 80.29 and touched a fresh all-time low of 80.35 a US dollar. On the sectoral front, except Power, FMCG and Auto, all other sectoral indices ended lower with the Bank Index shed over a percentage.
Nifty 50 top gainers are Titan, HUL, Asian Paints, Maruti and Eicher Motors while Power Grid, HDFC Bank, Axis Bank, HDFC and ONGC were among the top losers.