Market falls for second straight session as Fed signals rate hike by 2023

The market ended lower for the second consecutive session on June 17 amid volatility due to weak global cues after the US Federal Reserve signalled higher rates in 2023 in its policy outcome the previous day.

At close, the Sensex was down 178.65 points, or 0.34 percent, at 52,323.33 and the Nifty was down 76.10 points, or 0.48 percent, at 15,691.40.

“The market witnessed profit booking following the global trends. Market continues to resist above 15,750 and has taken a dip at 15,620. If market closes below the levels of 15,650, (it) might see a correction till the levels of 15,470-15,500,” said Ashis Biswas, Head of Technical Research at CapitalVia Global Research.

The momentum indicators like RSI and MACD were pointing to a small correction, he said.

Signalling that broad changes in policy may happen sooner than expected, US central bank officials moved their first projected rate increases from 2024 to 2023, with 13 of 18 policymakers foreseeing a “liftoff” in borrowing costs that year and 11 seeing two quarter-percentage-point rate increases, news agency Reuters reported.

Seven officials see rates moving higher next year, opening the possibility of even more aggressive action, it added.

Except IT and FMCG, all indices ended in the red, with metal index falling over 2 percent. BSE midcap and smallcap indices shed 0.5-1.3 percent.

Adani Ports, Tata Steel, IndusInd Bank, Hindalco and Eicher Motors were among major losers, while TCS, UltraTech Cement, HDFC Life, Tata Consumer and Asian Paints were among the major gainers on the Nifty.

Stocks & sectors

On the BSE, auto, bank, healthcare, metal, power and realty indices fell 1-2 percent, while IT index added nearly 1 percent.

Among individual stocks, a volume spike of more than 600 percent was seen in Sun TV Network, Grasim Industries and Trent.

Long buildup was seen in Sun TV Network, Marico and Trent, while short buildup was seen in Grasim Industries, LIC Housing and Tata Steel.

More than 450 stocks, including Asian Paints, HPCL, Mastek and Gati, hit a fresh 52-week high on the BSE.

Technical View

The Nifty formed a bullish candle on the daily scale as it closed higher than its opening zones but ended the session with a loss of around 75 points.

“The index has to hold above 15,700 zones to witness an up move towards 15,800 and 15,900 zones, while on the downside, support can be seen at 15,600 and 15,550 zones,” said Chandan Taparia of Motilal Oswal Financial Services.