Stock Market: Indices edged to cliffs; global cues turn super bearish
Photo credit Olectra Greentech
By S Jha
New Delhi, February 24: The global equity market is poised for sharp selloff this week amid a major heat up of geo-political and economic factors. Inflation number in the US came sharply above expectation to send Dow Jones crashing aby almost one a half points. The day was also marked by the anniversary of the Russian invasion of Ukraine, which saw the western nations further clamping up sanctions against Moscow.
The sharp rise in the inflation numbers in the US is stoking fear of the Federal Reserve sticking to aggressive stance to hike rates. The US Fed action will have ripple effects as the Central Banks will seek to also match to curb excessive outflow of dollar. India reported a sharp dip in the foreign currency reserves amounting to $5.7 billion this week, which confirmed the trend of the hot money capital flight out of the country.
Additionally, the foreign institutional investors once more sold a net of about Rs 1500 crores in the cash market on Friday. The domestic institutional investors poured in similar amounts in the equity markets, but they were not enough to turn the tide against the negative sentiments.
The indices are hurtling down, sliding lower and lower day after day. The rally in the indices are sold out. The market is without leadership. The IT sector tries to defend the indices, but sell on the rally is seen kicking in to take the broader market lower.
Rout in the Adani group of companies continues unabated barring Adani Port and SEZ and Ambuja Cement, which is rejecting bear attack on the back of the growth prospects as stated in the management commentary. The likes of Adani Green, Adani Gas, Adani Transmission have heavy volume of pending sellers, ensuring that they remain locked in the lower circuits.
The indices may have lost heavily on Friday if Reliance Industries, the index heavyweight hadn’t come in the play to save from steep fall. Bank Nifty was helped by the gains in the Axis Bank, which is on course to complete the acquisition of the Citi Bank credit card business in India, which is stated to consist of high net worth individuals and may give fresh legs to the Axis Bank for a possible rerating. Olectra Green gained over 19 per cent, as the automobile company has been trending for several weeks on the electric vehicle theme.
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