The Sensex and Nifty50 were down half a percent each in the first few minutes of trading after a muted start. Globally, nervousness persists among investors amid IMF and World Bank recession warnings and a U.S. policy rate decision expected this week.
Indian equity benchmarks started the trading week on a lackluster note amid recession fears and jitters ahead of a widely expected 75 basis point hike in key U.S. interest rates this week. Losses in financials and FMCG stocks put pressure on the market, although gains in IT stocks limited the decline.
A total of 25 stocks in the Nifty50 basket started the day in the red. UltraTech, Bharti Airtel, ITC, JSW Steel and ICICI Bank were the major laggards.
Kotak Mahindra Bank, Grasim, HDFC Bank, Tata Motors and SBI – opening up to 0.4% lower – were also among the hardest hit blue chip stocks.
In contrast, Bajaj Finserv, ONGC, Infosys, Tata Consumer and Mahindra & Mahindra were the main gainers.
Wipro, HDFC Life, Bharat Petroleum, Hindalco and UPL were also among the top stocks that rose the most.
ICICI Bank, Asian Paints, Kotak Mahindra Bank and Reliance were the main contributors to the fall of the two main indexes.
“The market is only expected to take a decisive trend after the Fed policy announcement on September 21,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
“The short-term texture has weakened and a buy-on-dip strategy is unlikely to work in the current risky global environment. FIIs turning short are negative in the short-term,” a- he declared.
Shares of ONGC rose after the government last week cut a windfall tax on domestically produced crude oil, in line with lower global rates.
India’s top oil and gas producer wants the government to scrap the tax and instead use the dividend route to reap windfall profits from soaring energy prices this year.
The overall market breadth was in favor of the bulls, as 1,620 shares rose and 1,408 fell on BSE in early trades.
Shares in other Asian markets were broadly in the red after two-month lows on Dalal Street amid recession warnings from the IMF and World Bank. Nervousness also lingered as investors awaited a decision on the Fed’s key rates this week.
MSCI’s broadest index of Asia-Pacific stocks outside Japan was down 0.5% at last count. Hong Kong’s Hang Seng fell 0.8% and China’s Shanghai Composite was flat. The Japanese market was closed for a holiday.
S&P 500 futures edged down 0.2%, suggesting a slow start on Wall Street.
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