Stock Market Today: Frontline indices extended their decline into the fourth day as the global mood turned cautious amid 40-year high inflation in the US. Market watchers now expect the US Fed to hike rate by as much as 100 basis points in the July meeting. Even a decline in Brent crude oil price to a three-month low couldn’t lift the sentiment. At close, the Sensex was down 98 points or 0.18 per cent at 53,416.15, and the Nifty was down 28 points or 0.18 per cent at 15,938.70.
Top Gainers & Losers
ONGC, Sun Pharma, Kotak Mahindra Bank, Dr Reddy’s Labs and Maruti Suzuki were among the top Nifty gainers, while losers included Hero MotoCorp, Axis Bank, HCL Technologies, Tech Mahindra and SBI.
On the sectoral front, Information Technology and PSU Bank indices fell 1-2 percent, while Oil & Gas and Power indices gained 1-1.6 percent.
The BSE midcap and smallcap indices ended in the red.
Among stocks, Tata Metaliks tanked 6 per cent on reporting 99 per cent decline in its net profits. Its margins dropped to 3.5 per cent from over 25 per cent a year ago.
Sanofi India rose over 4 per cent. The company will consider a special dividend on July 26.
Investors will closely monitor macro data – wholesale inflation figures for the month of June. That said, corporate earnings for the June quarter of 2022 (Q1FY23) will continue to determine investor sentiments. ACC, L&T Infotech, and Tata Elxsi will report Q1 numbers on Thursday, July 14.
Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services, said: “Even though the keenly awaited US CPI inflation data for June came at 9.1 per cent against expectation of 8.8 per cent, US markets declined only moderately, by less than 1%. It is important to note that core inflation ( inflation minus food and energy ) in the US is declining and, therefore, CPI inflation too will decline, going forward, since crude prices have corrected sharply. The higher than expected US inflation means the Fed will continue its aggressive tightening in the near-term with another 75bp hike in July, perhaps even by 100bp. But the long-term bond yields in the US indicate a possible rate cut by March 2023. In brief, this 9.1 per cent inflation print is likely to be the peak inflation.”
“FIIs have used the July rally to press further big selling ( Rs 2840 cr yesterday) after what appeared as selling exhaustion in early July. This renewed FII selling may strengthen the bears but DIIs and retail investors are likely to turn strong buyers at every dip since India’s economic fundamentals are strong and, more importantly, valuations are attractive particularly in segments/ stocks where FIIs are selling,” Vijaykumar said.
Global Cues
Asian shares struggled on Thursday and the safe haven dollar was strong as white hot U.S. inflation data drove fear the Federal Reserve will raise interest rates even more aggressively to slow price increases, potentially sending the economy into recession.
Tokyo stocks opened lower on Thursday following moderate losses on Wall Street even after fresh data indicated inflation in the United States remained at a high level. The benchmark Nikkei 225 index fell 0.58 per cent, or 152.95 points, at 26,325.82 in early trade, while the broader Topix index lost 0.69 per cent, or 13.11 points, to 1,875.74.
Wall Street stocks declined Wednesday after the latest report showing surging inflation added to recession fears, intensifying debate on next steps by the Federal Reserve to tame prices. US inflation surged to a fresh peak of 9.1 per cent in June, driven in part by significant increases in gasoline prices.
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