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Markets in a bloodbath as investors react to Fed's outlook globally; Sensex erases 57k, Nifty 50 holds 17k; Largecap, Midcap stocks in a free fall

On BSE, the MidCap index dived nearly 1.75%, while indices like Sensex 50 and Sensex Next 50 shed by 1.5% each.

January 27, 2022 9:55 IST | India Infoline News Service
Arrow-graph-going-down-and-businessman-is-falling-down
Indian markets were in a bloodbath on Thursday's opening bell tracking weak global cues after US Federal Reserves held onto its hawkish stance that sparked steep free fall in technology stocks globally. All sectoral indices on exchanges BSE and NSE nosedived in the range of 1-3%. Consumer Durable stocks bled the most in the panic selloff, while IT, banking, metals and pharma stocks contributed to the downside substantially as well.

Sensex has erased the 57,000-mark and even reached below 56,700-level. In the early deals, Nifty 50 even scrapped the 17,000-mark and has been struggling on that level.

December 2021 (Q3FY22) quarterly earnings continue to influence markets mood. Also, the expiry of the monthly F&O contracts is due today.

However, investors also carry a frenzy selling bias as they brace for the Union Budget 2022-23 scheduled for February 01, 2021.

Today, for the volatile January series expect higher than normal volatility as markets head into the Union Budget on 1st February.

At around 09.55 am, Sensex was trading at 56,986.79 down by 871.36 points or 1.51%. The index has touched an intraday low of 56,674.51.

Nifty 50 performed at 17,020.35 lower by 257.60 points or 1.49%. The index has clocked the day's low of 16,927.85.

In the broader markets, Midcap and LargeCap stocks took a massive beating. On BSE, the MidCap index dived nearly 1.75%, while indices like Sensex 50 and Sensex Next 50 shed by 1.5% each.

On BSE, in the case of sectoral indices, the Consumer Durables index dropped nearly 1,135 points, while the IT index slipped over 700 points. Pharma and Metal index declined by 1.6% and 2%.

Top bulls on BSE were - Maruti Suzuki, Axis Bank, Kotak Bank and IndusInd Bank.

Top bears on BSE were - Titan, Tata Steel, HCL Tech, Tech Mahindra, Wipro, DR Reddy's Lab, Bajaj Finance, HDFC Bank, Bajaj Finserve and Nestle dipping between 2-4%.

Other stocks like Power Grid, Infosys, Asian Paint, TCS, ICICI Bank, HDFC, Ultratech Cement, Reliance Industries, Sun Pharma and HUL plunged between 1-2%.

Companies set to announce their Q3 results are - Bharat Heavy Electricals, Punjab National Bank, RBL Bank, Canara Bank, Indus Towers, Accelya Solutions India, AIA Engineering, Arvind, Aurionpro Solutions, Birlasoft, CG Power and Industrial Solutions, Chalet Hotels, Coforge, Colgate-Palmolive, Dalmia Bharat, Exxaro Tiles, Fino Payments Bank, GHCL, Gujarat Mineral Development Corporation, Home First Finance Company, HSIL, Laurus Labs, LIC Housing Finance, Mahindra Logistics, CE Info Systems, Motilal Oswal Financial Services, Nippon Life India Asset Management, PSP Projects, Route Mobile, Transport Corporation of India, Vaibhav Global, Wabco India, and Wockhardt.

On the global front, Asian markets reacted negatively after the Federal Reserve outlook. Japanese Nikkei 225 plummetted by around 825 points, while South Korea's KOSPI index shed nearly 3.5% on the back of outflow in ETFs. The Hang Seng and S&P/ASX tumbled by over 2.6% and 2%. The quantum of bearish tone was lower in Chinese stocks compared to its counterparts as the Shanghai Composite index dipped by 0.9%.

On Wednesday, the Fed announced that the Committee seeks to achieve maximum employment and inflation at the rate of 2 per cent over the longer run. In support of these goals, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 per cent. With inflation well above 2 per cent and a strong labour market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.

Further, the Fed said that the Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March.

Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month, Fed highlighted.

Further, the US central bank said that the Federal Reserve's ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

Overnight, Bond yields spike to 1.83% while oil prices also see gains even as the US dollar index crosses 96.20.

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