Stock markets duck US Fed; defence scrips run full steam

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By S Jha

New Delhi, November 3: The Indian stock markets staged a smart recovery within opening after the US Fed decision to hike the interest rate by 75 basis points pushed down the bourses at the ring of the bell on the Dalal Street. The Bank Nifty came roaring to stage a stunning comeback for the Indian stock indices on Thursday morning.

The Axis Bank and the State Bank of India came strongly to push the Bank Nifty higher, staging 600 points reversal from the opening during the day. Both the scrips have been in strong momentum for about one week. The banking sector has been leading the equity market rally amid their improving financial performance, with the rate hikes helping them report better profits. One or the other banking scrip comes in action on bourses to keep the Bank Nifty steady.

Sensex and Nifty, however, closed marginally lower, after both the indices recovering most of their losses in the first hour of the trading session. Both the indices were helped by strong institutional buying, as the foreign institutional investors (FIIs), which had been aggressively buying into the Indian equity markets for the past few days again reported a net purchase of Rs 678 crores. The domestic institutional investors in contrast have been selling the Indian equity markets, with a net sale of Rs 732 crores on Thursday.

While the banking and the financial scrips are largely trending up, the IT stocks are clear losers in the second half of 2022, and there was no trend reversal in the Thursday session. After two days of marginal gains, the IT scrips again gave up all the gains on Thursday. Similar trend is reported by the thematic mutual fund schemes on IT.

But defence stocks are least affected by the market volatility, with one direction movement, making significant gains amid anticipations that the government’s bid to award $25 billion of local manufacturing will help them scale up. The ship builders, which are mostly the public sector companies, are running hot scrips with the likes of Garden Reach Shipbuider, Mazdock and so on making handsome gains in quick times, while being at the record high.

Similar trends were seen in other defence stocks such as Data Patterns, Bharat Electronics, Paras Defence and others which gained significantly. Meanwhile, the Dow Jones, which is setting the direction for the Indian equity markets, was trading flat in late afternoon on Thursday.