Stock market indices open in red: Sensex plunges nearly 1,000 points, Nifty below 17,000

The stock market indices opened lower on weak global cues.

At 09:16 AM, the Sensex was down 989.82 points or 1.71 percent at 56,868.33. The Nifty was down 291.30 points or 1.69 percent at 16,986.70. About 603 shares have advanced, 1524 shares declined, and 99 shares are unchanged.

Among major losers on the Nifty at the opening bell were HDFC Bank, Grasim Industries Nestle India, Tech Mahindra, and Wipro. ONGC was the only gainer.

Nifty snapped a five day losing streak on January 25 even as the other Asian markets continued their decline. At close Nifty was up 0.75 percent or 128.9 points at 17277.9. In the process, Nifty was the best performing index in the Asian region.

Nifty recovered smartly from the opening lows on Janurary 25 to end the day in the positive. It has recovered from an important support of around 16,800. Advance decline ratio improved sharply to much above 1:1 after touching an 22 month low on the day before. Though Nifty seems to have made a near term bottom on Jan 25, a retest of that level of slight breach of that level cannot be ruled out.

Asian shares steady in early trade

Asian share markets steadied on Wednesday after three sessions of losses as investors awaited any hints about faster tightening of monetary policy from the U.S. Federal Reserve later in the day.

US stocks decline

US stocks finished mostly lower Wednesday and bond yields jumped, after the Federal Reserve signaled rate hikes are on the way and other monetary policies eventually will tighten. Stocks lost their grip on earlier gains Wednesday in another volatile session, after the Federal Reserve at its first meeting of 2022 kept benchmark interest rates steady, but signaled that monetary policy will soon tighten.

Consumer confidence slips in January

A survey of consumer confidence fell 1.4 points in January to 113.8, indicating that omicron and high inflation weighed on the minds of Americans early in the new year. Economists polled by The Wall Street Journal had forecast the index to shrink to 111.7 from a revised 115.2 in December.

Hungary's forint gave up session losses to rise 0.4 percent against the euro after the country's central bank raised its base rate by 50 basis points to 2.9 percent, the highest in eight years, to fight inflation which is forecast to be at its highest level in a decade this year. Expectations were for the central bank is that it will hike by 30 basis points.

Fed Chair says officials 'of a mind' to raise interest rates in March

Federal Reserve Chairman Jerome Powell on Wednesday said the central bank “is of a mind” to raise interest rates in March as part of an effort to combat the highest inflation in decades. Yet Powell was less certain when the Fed will begin to reduce the balance sheet. “We are going to be led by the incoming data and evolving outlook,” he said. Powell told reporters there was significant room to raise interest rates without hurting the labor market and didn’t rule out the prospect of rate increases larger than 25 basis points given the scope of the inflation challenge.

The 10-year US Treasury yield rose 6.1 basis points to 1.845 percent Wednesday, the second-highest level this year.

IMF raises India GDP forecast

The International Monetary Fund (IMF) has raised its forecast for growth in India's gross domestic product (GDP) in FY23 by 50 basis points (bps) to 9 percent. India's GDP growth forecast for FY24 was also raised by 50 bps to 7.1 percent. Explaining the upward revision in an update to its World Economic Outlook report, released on January 25, the IMF said it expects an improvement in India's credit growth – which would boost consumption and investment – and "better-than-anticipated performance of the financial sector". The hike in the forecast for India for the next financial year was accompanied by a downward revision in the growth estimate for FY22 to 9 percent.

IMF downgrades global growth forecast

The International Monetary Fund (IMF) has downgraded its global growth forecast for this year as rising COVID-19 cases, supply chain disruptions and higher inflation hamper economic recovery. In its delayed World Economic Outlook report, published Tuesday, the IMF said it expects global gross domestic product to weaken from 5.9 percent in 2021 to 4.4 percent in 2022 — with this year’s figure being half a percentage point lower than previously estimated.

The revised outlook is led by growth markdowns in the world’s two largest economies; the US and China. The US is expected to grow 4.0 percent in 2022, 1.2 percentage points lower than previously forecast as the Federal Reserve moves to withdraw its monetary stimulus, even as supply chain disruptions weigh on the economy.

The updated outlook also removed President Biden’s signature Build Back Better fiscal policy package from its baseline projection after failure to pass the original bill.

China, meanwhile, is predicted to grow 4.8 percent this year, down 0.8 percentage points from earlier estimates amid disruptions caused by its zero-COVID policy, as well as “projected financial stress” among its property developers.

Bank of Canada maintains policy rate

In other central bank action, the Bank of Canada on Wednesday held its rates steady at 0.25 percent, but said hikes will be coming this year to help it control high inflation. It also is considering letting maturing government bonds roll off its balance sheet.

Oil prices up on escalating Russia-Ukraine border tensions

Growing tension as Russian troops massed on Ukraine's border continued to push oil prices higher amid concerns of supply disruption, with oil clearing $90 a barrel for the first time since 2014.

China industrial firms grow at slower pace in December

Profits at China's industrial firms grew at a slower pace in December, the statistics bureau said on Thursday, as factory-gate inflation continued to ease, pointing to cooling demand amid mounting economic challenges. Profits rose 4.2 percent year-on-year, the slowest rate since April 2020. For 2021, industrial firms' profits rose by a whopping 34.3 percent year-on-year.

Published on: Thursday, January 27, 2022, 09:25 AM IST