Stock Market: Hawkish Fed downs Indices; pharma shines amid rout

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By S Jha

New Delhi, June 15: Indian indices faced rout on Thursday on the back of the US Federal Reserve maintaining that it’s not yet done with the hard press on inflation as two more hikes could be expected later this year. Despite the US Fed pressing the rate hike pause button almost after 15 months, the equities bled on Thursday, with advance decline ratio favouring the losers.

The market participants’ expectations of cheers from the US Federal Reserve watered down by the accompanying hawkish commentary. The impact was visible on the Bank Nifty, which tanked by over 544 points.

The Bank Nifty is now below the psychological level of 44,000. All the Bank Nifty constituents such as IndusInd Bank, ICICI Bank, HDFC bank, Kotak Mahindra Bank closed the session with cuts of more than a per cent on Thursday, which was also weekly option expiry day.

The Nifty, while resisting the bears, also joined the Bank Nifty in diving deep, as the index closed with a cut of over 67 points. Nifty is also now back in the congestion zone of 18600-700, as the index closed at 18688. Nifty at one point during the day almost touched 18800 level.

Pharma sector outperformed the market on a bearish day, gaining strongly. Apollo Hospital, which has been trending up for the past few days, climbed sharply to close above the level of Rs 5200. Divi’s Lab, which has also been trending for more than a week now, also gained strongly. Dr Reddy’s Lab was another gainer from the large cap in the pharma sector. Cipla too gained strongly on Thursday to make a case for a secular rally in the pharma sector.

Realty index has also been outperforming the market ever since the Reserve Bank of India pressed the pause button the rate hikes. Godrej Properties gained strongly, rising by over four per cent on Thursday. A number of realty companies have been on a gaining spree in the recent days.

R Systems despite giving a modest fourth quarter result has been trending for the last one month. The scrip for several months had been trading in the range of Rs 300 and Rs 380. But it has now gone over Rs 400 level, netting a gain of over 60 per cent in just one month, to close at Rs 414 on Thursday, while during the day it had climbed to Rs 438. It may be noted that several of the small and mid size IT companies have been trending up for a month now.