Indices turn range bound; Nifty above 17,000 level

The benchmark indices were trading in a narrow range near day's low in mid-afternoon trade. The Nifty was hovering above 17,000 level. IT stocks bucked broader market weakness.

At 14:30 IST, the barometer index, the S&P BSE Sensex, tanked 664.10 points or 1.15% at 57,237.04. The Nifty 50 index lost 199.45 points or 1.16% at 17,048.95.

In the broader market, the S&P BSE Mid-Cap index shed 1.97% while the S&P BSE Small-Cap index fell 1.45%.

The market breadth was weak. On the BSE, 1,087 shares rose and 2,221 shares fell. A total of 99 shares were unchanged.

Numbers to Track:

The yield on 10-year benchmark federal paper rose to 6.389% as compared with 6.374% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 76.1525, compared with its close of 76.09 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.18% to Rs 48,735.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.08% to 95.97.

In the commodities market, Brent crude for February 2022 settlement fell 51 cents at $74.51 a barrel.

Buzzing Index:

The Nifty PSU Bank index declined 3.04% to 2,595.55. The index has lost 7.18% in five trading sessions.

Indian Bank (down 4.76%), Canara Bank (down 3.98%), Bank of Baroda (down 3.78%), Punjab National Bank (PNB) (down 3.05%) and Bank of India (BOI) (down 2.64%) were the top losers in the PSU Bank segment.

Union Bank of India declined 2.38%. Life Insurance Corporation of India (LIC) bought 13,73,79,411 equity shares or 2.01% stake of Union Bank of India from 21 March 2020 to 15 December 2021. Post transaction, Life Insurance Corporation of India (LIC) increased its shareholding to 35,31,66,823 equity shares or 5.167% stake from 21,57,87,412 equity shares or 3.157% stake held in Union Bank of India. The deal was executed as market purchase.

Global Markets:

European shares fell across the board while Asian shares ended on a mixed note on Friday, 17 December 2021, as concerns persisted about the spread of the omicron COVID-19 variant and the inflation outlook. The U.K. reported nearly 90,000 covid cases in a single day on Thursday, but daily deaths remain relatively stable.

The Bank of England hiked its interest rates on Thursday for the first time since the pandemic started. It raised its main interest rate from a historic low of 0.1% to 0.25% amid mounting inflation pressure. The Bank of England is the first major central bank to tighten monetary policy post the onset of the coronavirus pandemic.

The European Central Bank further cut its bond purchases overnight but vowed to continue its unprecedented monetary policy support for the euro zone economy into 2022. It left the benchmark refinancing rate unchanged at 0%, while the rate on its marginal lending facility remained at 0.25%.

In Asia, the Bank of Japan maintained its short-term interest rate target at (-) 0.1%.

Meanwhile, U.S. President Joe Biden signed a debt ceiling increase into law on Thursday, ensuring the U.S. will not default on its debt for the first time ever. The measure lifts the government's borrowing limit by $2.5 trillion, which is expected to allow the U.S. to cover its obligations into 2023.

Meanwhile, the number of Americans applying for unemployment benefits rose last week despite signs that the U.S. labor market is rebounding from last year's coronavirus recession. Jobless claims rose by 18,000 to a 2,06,000, still low by historical standards. The four-week average, which smooths out week-to-week volatility, fell by 16,000 to less than 2,04,000, the lowest level since mid-November 1969, according Department of Labor figures released Thursday.

Altogether, 1.8 million Americans were receiving traditional jobless benefits the week that ended 4 December 2021, down by 1,54,000 from the previous week.

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