Stock Market dives deep amid growing US Fed fear

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By S Jha

New Delhi, January 19: Broader market selloff on Tuesday saw Sensex tanking by over 700 points while Nifty went down by almost 240 points in a day market by risk-off sentiments among the investors. The fiery spell in the crude oil prices also brought the bears in full strength on the street with bulls stepping back from the ring in the absence of positive cues.

Drone attacks by Ukraine on Russian refineries led to the sharp spike in crude oil prices. This has been a net negative factor for India. With geopolitics in an extended worsening phase, choppy behaviour in the oil prices is expected by the market participants. Analysts, however, claim that Russia will be able to sustain the oil supplies. The Russian economy has escaped the western sanctions by pumping additional global oil supplies.

The US Federal Reserve is likely to not tinker with rates amid consensus opinion emerging of hawkish views due to the strengthening of the inflation numbers as well as the strong labour market. There are also fears that the commentary from the US Fed may not cheer the market. The rate cuts which were expected from early this year now looks postponed for later dates as per the emerging views among the market participants.

The IT index went down by 2.66 per cent on Tuesday led by the selloff in TCS. Promoters as part of compliance norms are diluting stakes. The selloff in the IT index is in contrast to tech rally in the US bourses. None of the sectoral indices were in the green on Tuesday, showing the ferocious selloff on the street on Tuesday.

Yet, there were a few outperformers in the market which stood the fury of the bearish sentiments. Bajaj Auto led from the front, rising sharply in the second half of the day to maintain the winning run on the street. The two-wheeler giant has been in a stellar run for the past few months, extending the gains on the street.

Two-wheeler scrips were also in demand on the street on Tuesday. In the first half, Hero Motors too showed signs of life. But it was Eicher Motors which gained pace by the time the bell rang on the street.

Bajaj Finance was also strong during the day. This scrip is showing signs of momentum. Kotak Mahindra Bank once more tried to break out of Rs 1755 level, but marginally retraced. HDFC Bank was also in the green in the last few minutes.

(Disclaimer: The article makes no recommendation for buy or sell of shares of any company)