Market hits day's low; Nifty cracks below 16,900

The benchmark indices hit fresh intraday low in early afternoon trade. Media and PSU banks bucked the broader selling pressure. The Nifty declined below 16,900 mark. Fears of monetary policy tightening, geo-political tensions of Russia invading Ukraine and firm crude oil prices dented investors sentiment.

At 12:29 IST, the barometer index, the S&P BSE Sensex, slumped 1,318.34 points or 2.28% at 56,539.81. The Nifty 50 index tumbled 380.2 points or 2.28% at 16,898.10.

In the broader market, the S&P BSE Mid-Cap index declined 2.6% while the S&P BSE Small-Cap index slipped 1.65%.

The market breadth was weak. On the BSE, 1,026 shares rose and 2,246 shares fell. A total of 108 shares were unchanged.

The Budget session of Parliament is set to commence on 31 January 2022 and will conclude on 8 April 2022. The government will present the Budget for fiscal 2022-23 on 1 February 2022. The Economic Survey is likely to be tabled on 31 January 2022 after the president's address.

On the political front, developments in the upcoming assembly polls in Uttar Pradesh, Uttarakhand, Goa, Punjab, and Manipur will be closely watched. Polls in all the five states will be held between 10 February 2022 and 7 March 2022 in seven phases. The counting of votes and the result will be declared on 10 March 2022.

COVID-19 Update:

In the last 24 hours, India saw a marginal rise in fresh cases, reporting over 2.86 lakh (2,86,364) on Thursday. With around 3.06 lakh (3,06,357) recoveries, the number of active cases has declined to 22 lakh (22,02,472). The daily positivity rate has increased slightly to 19.59%, while the weekly positivity rate is now 17.75%.

Economy:

The International Monetary Fund (IMF) has raised its forecast for growth in India's gross domestic product (GDP) in FY23 by 50 basis points (bps) to 9%. India's GDP growth forecast for FY24 was also raised by 50 bps to 7.1%. Explaining the upward revision in an update to its World Economic Outlook report, the IMF said it expects an improvement in India's credit growth which would boost consumption and investment and "better-than-anticipated performance of the financial sector".

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, surged 9.1% to 23.3025. The Nifty 27 January 2022 futures were trading at 16,888, at a premium of 10 points as compared with the spot at 16,878.

The Nifty option chain for 27 January 2022 expiry showed maximum Call OI of 138.6 lakh contracts at the 17,000 strike price. Maximum Put OI of 79 lakh contracts was seen at 16,500 strike price.

Buzzing Index:

The Nifty Bank index slumped 628.25 points or 1.67% to 37,087.50. The index rose 2.05% in previous session.

HDFC Bank (down 3.29%), ICICI Bank (down 2.41%), IndusInd Bank (down 2.36%), Bandhan Bank (down 1.71%), IDFC First Bank (down 1.55%) and SBI (down 0.81%) were top losers in banking space.

Stocks in Spotlight:

RailTel Corporation of India said that it had received work order from Employees Provident Fund Organisation (EPFO) worth Rs 14.73 crore.The order is for the deployment and management of diagnostic and performance tools as managed service for three years.

J B Chemicals & Pharmaceuticals gained 1.35% to Rs 1,751.90 after the pharmaceutical company announced that it will acquire brands for the India market from Sanzyme Private Limited for Rs 628 crore. Sanzyme Private Limited (Sanzyme), is a leading player in the probiotics and reproductive health segment in the country. The company is engaged in the manufacture, distribution and marketing of specialty probiotics formulations, infertility management products and nutraceuticals products.

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