What happened with the Share Market Today

After a rally of two trading sessions, equity benchmark Sensex declined nearly 300 points on account of profit booking in cement, auto and financial stocks amid weak global markets and ahead of the US Federal Reserve’s policy meeting outcome in which Jerome Powell is expected to go for another large rate hike.  Undertone of the Market remained fragile across Asia, as investors braced for a potential interest-rate hike by the US Federal Reserve later today. Moreover, geo-political tension between Russia and Ukraine have dampened the market sentiment. As a results, Brent Crude surged by 3% to above $93/bbl. US Asian markets slipped 1% as investors anticipated another large Federal Reserve interest- rate hike (expectation of 75bps) and monitored increasing geopolitical tensions with Russia. India Vix gained nearly 3% to close above 19.

Sensex declined 263 points or 0.6% to end at 59,457. Its broader peer, Nifty ended at 17,718, down 98 points or 0.6%. Indusind Bank, Power Grid, Hindalco, Cipla, NTPC were major loser among the Nifty stocks while Britannia, Hindustan Unilever and ITC among the major gainers.  Sectorally, the Nifty Metal index fell 2 per cent, while Nifty Pharma plunged 1.40 per cent. Nifty Midcap0 and Smallcap0 declined over half percent each. However, Nifty FMCG Index  gained over 1% and select sugar stocks witnessed fresh buying.  

Overnight US market dropped by 1% after the US Dollar Index spiked to 20-year high, 10-year US Treasury yields rose to 3.56% since April 2011 and two-year notes, which are sensitive to the interest-rate outlook, rose to 3.95%, highest level since 2007. One day later, the Bank of England (BoE) is predicted to deliver another sizeable increase in British borrowing costs. Moreover, geo-political tension between Russia and Ukraine may negative impact in the market. Russian stocks plunged 10% on Tuesday on signs that Moscow may escalate its war on Ukraine. Traders were booking profit while the Asian Development Bank (ADB) has slashed India’s economic growth projection for 2022-23 to 7 per cent from 7.2 per cent earlier, citing higher than expected inflation and monetary tightening. 

Adani group stocks are witnessing profit booking  after the news that the Adani Group pledged both ACC and Ambuja shares valued at about $13 billion. ACC slipped 7% to close at Rs2531 and Ambuja Cement nosedive 6% to close at Rs541. Other Adani group stocks, Adani Enterprises and Adani Port shed by 5% and 4% respectively.

Banking stocks witnessed profit booking. Indusind Bank slipped 3% to close at Rs1224, Bandhan Bank, Kotak Bank, SBI and Axis Bank declined 1% each. FMCG stocks gained on hope of good monsoon will improve demand. Britannia surged 3% to close at Rs3766. ITC advance over 1% to close at Rs341. Radico Khaitan, Dabur India, Hindustan Unilever and Marico gained between 1-3%.

Cement stocks witnessed profit booking. Cement major UltraTech Cement slipped 3% to close at Rs6314 and JK Cement declined 5% to close at Rs2769. Sugar stock gained after the news that the government said its examining requests to raise the minimum selling price for sugar and raise prices of ethanol, Renuka Sugar gained 3% to close at Rs56 and Andhra Sugar advance 2% to close at Rs148.   

Technical Outlook:
Nifty index opened negative and moved in a volatile way within a wider range of 175 points. It faced some weakness at higher levels but took support near 17667 zones and rebounded slightly to close with losses of around 100 points. It formed a small-bodied candle on daily scale in between the broader trading range which indicates decisiveness. Even though buying interest was seen from lows but absence of follow up activity is seen at higher zones. Now, it has to hold near to 17667 zones, for an up move towards 17850 and 18000 zones whereas support exists at 17550 and 17442 zones.