After a gap down opening, domestic benchmark indices declined further and closed with deep losses for the third consecutive session on Friday, 23 September 2022. Weak global cues impacted investor's sentiments. US Fed's hawkish stance on interest rates has increased fears of global recession. Traders were also cautious ahead of RBI's policy meet next week. Selling was wide spread. Interest-rate sensitive sectors like banks, autos and realty were under pressure. Defensive plays like pharma, healthcare and FMCG outperformed the benchmarks.

The barometer index, the S&P BSE Sensex, dropped 1020.80 points or 1.73% to 58,098.92. The Nifty 50 index tumbled 302.45 points or 1.72% to 17,327.35. Both the indices have corrected over 2.7% in three consecutive sessions.

Power Grid Corporation of India (down 7.93%), SBI (down 2.99%), HDFC (down 2.72%), HDFC Bank (down 2.64%), Reliance Industries (down 1.87%) and ICICI Bank (down 2.23%) were major drags.

In the broader market, the S&P BSE Mid-Cap index fell 2.28% while the S&P BSE Small-Cap index declined 1.92%.

The market breadth was weak. On the BSE, 983 shares rose, and 2,497 shares fell. A total of 107 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 9.44% to 20.59.

RBI's Policy Meet:

The Reserve Bank of India (RBI)'s six-member Monetary Policy Committee is scheduled to meet next week during 28-30 September 2022. RBI Governor Shaktikanta Das will announce the MPC decision on 30 September 2022, the last date of the meeting. The RBI is widely expected to maintain the balancing act between growth and inflation.

In the past three policy reviews, the RBI's rate-setting panel has raised 140 basis points in total since May this year. Currently, the repo rate, the interest rate at which the RBI lends to the commercial bank, stands at 5.40%.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose to 7.4334 as compared with 7.312 at close in the previous trading session.

The partially convertible rupee was hovering at 81.015, compared with its close of 80.79 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement lost 1% to Rs 49,500.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.69% to 112.12.

The United States 10-year bond yield was up 1.52% to 3.764.

In the commodities market, Brent crude for November 2022 settlement fell $2.14 or 2.37% at $88.32 a barrel.

Global Markets:

The Dow Jones index was down 388 points, indicating a negative opening in the US stocks today.

Shares in Europe and Asia declined across the board on Friday as investors feared that rising interest rates across the globe may destabilize economic growth. Japan markets were closed for a holiday Friday.

US stocks ended lower on Thursday, falling for a third straight session as investors reacted to the Federal Reserve's latest aggressive move to rein in inflation by selling growth stocks, including technology companies.

The US current account deficit narrowed sharply in the second quarter amid a surge in goods exports, data showed on Thursday. The Commerce Department said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted 11.1% to $251.1 billion last quarter. The current account gap represented 4% of gross domestic product, down from 4.6% in the January-March quarter.

The Bank of England raised its key interest rate to 2.25% from 1.75% on Thursday and said it would continue to respond forcefully, as necessary to inflation, despite the economy entering recession. The BoE's Monetary Policy Committee voted 5-4 to raise rates to 2.25%.

Stocks in Spotlight:

Tata Steel rose 0.58% after the steel major's board approved the amalgamation of seven of its subsidiaries - Tata Steel Long Products, Tata Metaliks, The Tinplate Company of India, TRF, Indian Steel & Wire Products, Tata Steel Mining and S&T Mining Company into and with their parent company Tata Steel. The decision was taken at a board meeting of the company held on Thursday (22 September).

Mahindra & Mahindra Financial Services (MMFSL) slumped 13.09% after the Reserve Bank of India (RBI) on Thursday barred the NBFC from appointing any agents for recovery or repossession. The RBI action came after MMFSL's loan recovery agents reportedly mowed down a pregnant borrower during a tractor repossession in Hazaribagh, Jharkhand.

Hero MotoCorp shed 0.89%. The company has hiked the ex-showroom prices of its motorcycles and scooters, with immediate effect i.e. 22 September 2022. The price revision has been necessitated to partially offset the impact of cost inflation. The price revision will be up to Rs. 1,000 and the exact quantum of increase will vary by model and market.

Piramal Enterprises fell 2.28%. The company on Friday (23 September 2022) announced that its board has approved fund raising up to Rs 750 crore via non-convertible debentures on private placement basis.

Cipla rose 0.88%. The company has received the establishment inspection report (EIR) indicating closure of the inspection. The company had earlier informed about the product specific pre-approval inspection (PAI) by the United States Food and Drug Administration (US FDA) at the Indore plant from 27th June 2022 to 1st July 2022.

Bombay Dyeing and Manufacturing Company tumbled 4.29%. The company's board approved raising upto Rs 940 crore through allotment of equity shares on rights basis to the eligible equity shareholders of the company.

Sterling and Wilson Renewable Energy rose 2.46%. The company's wholly owned step down subsidiary, Sterling and Wilson Solar Solutions Inc, along with its consortium partner signed a memorandum of understanding (MoU) with the Government of the Federal Republic of Nigeria to deliver the development, design, construction and commissioning of solar photovoltaic power plants with total installed capacity of 961 MWdc at five different locations in the Federal Republic of Nigeria along with battery energy storage systems with total installed capacity of 455 MWh.

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