Stock Market: Recession fear sinks indices; wild swings batter equities
By S Jha
January 10: Those who venture to predict market directions are ending with bloodied noses. After Friday equity bloodbath, the indices went soaring on Monday to erase all losses only to sink on Tuesday to bring fears back on the Dalal Street. The Indian stock markets tanked on Tuesday, closing below the comfort levels.
The World Bank later in the off-market hour lent its voice to the worst fears of the stock markets globally by stating that the world economy would grow by only 1,7 per cent in FY23 against 3.2 per cent seen last year. This is more bearish bet on the global economy than the projections of the International Monetary Fund (IMF), which had earlier estimated that the world economy in FY23 would grow by 2.8 per cent. The World Bank’s projection is nightmarish for the equity market participants.
Nifty and bank Nifty sunk to deeper levels, with the support levels broken along the journey. The last few days of the market actions have also given credence to the earlier projections that 2023 would be the year of equity market volatility.
TCS, which had come out with its third quarterly result in the off-market hours on Monday, opened in the red and remained under stress, for the IT behemoth could not meet the 12.5 per cent rise in the profit expectations of the street by clocking over 11 per cent rise. The global recession may have adverse impact on the IT stocks, which are already battered last year, losing over 50 per cent from the peaks.
Adani Group of stocks were hammered by the bears on the Dalal Street. Adani Enterprises, which is coming out with Rs 20,000 crores of FPO dived by over six per cent. The scrip has risen 18 times since the Covid-19 pandemic had sent the stock price to the level of Rs 80 in 2020.
Tata Motors and the metal pack ducked the bearish trends by rising sharply. Tata Motors had come out with sales numbers of Jaguars and Land Rovers, indicating that the auto giant may finally be turning bullish with demands picking up for its luxury SUVs. The metal space has been buzzing ever since China abandoned its Zero Covid Policy, and Hindalco again led the group with strong gains. The FIIs again dumped the Indian equities, with a sale of Rs 2100 crores. Their domestic counterparts chipped in with a net buy of Rs 1807 crores.
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