Indian equity benchmarks declined on Friday, snapping an eight-day bull run and a record-breaking closing streak of six consecutive days as investors took a breather and protected profits ahead of a key US jobs report, which indicated signs on the Federal Reserve’s tapping could give clues. Its aggressive rate hike plan.
The BSE Sensex index closed 415.69 points, or 0.66 per cent, lower at 62,868.50, and the broader NSE Nifty index fell 116.40 points, or 0.62 per cent, to close at 18,696.10.
Nevertheless, the Nifty has gained 3.6 per cent in the last eight sessions and ended with gains for the second straight week on Friday.
“Nifty futures outperformed its global peers and tested close to 19,000 level this week. However, in the short term, it is showing clear signs of exhaustion, with lagging sectors like IT now rising and banks underperforming. are,” said Rudra Murthy BV, Head of Research at Vachana Investments.
“It is expected that market will see some profit booking in coming week. Nifty may test 18,400 to 18,600 support zone before next big move. Local trigger comes from Gujarat election results which will come on 8th December.”
Both benchmarks posted eight consecutive days of gains after they ended the previous session at record highs, marking the sixth straight day of closing at all-time highs.
Sensex and Nifty have closed at new highs every day since the record-breaking rally started on Friday last week.
Despite foreign institutional investors (FIIs) selling shares worth 1,565.93 crore on Thursday, turning into profits, capital inflows have remained strong in November as the Federal Reserve indicated to slow down the pace of its rapid rate hike.
But bulls were restrained on Friday ahead of US non-farm payrolls data, which was to be released later after Wall Street equities closed lower overnight on Thursday.
Anita Gandhi, director, Arihant Capital Markets, said, “Investors are booking some profits after the recent rally. There is a shift from expensive stocks to value stocks at higher valuations.
As traders awaited monthly US jobs data for hints on upcoming policy moves from the Federal Reserve, global equities were on the defensive on Friday, stabilizing after recent big gains.
After two days of gains that put it on course for a seven-week winning streak, Europe’s Stoxx 600 index opened lower, while S&P 500 and Nasdaq 100 futures declined.
A measure of Asian shares fell for the first time in four days, with a five-day rally in the yen led by Japan adding to the downward pressure on stocks.
“The consensus is a recession is coming, but equities may not bottom out before they start, inflation won’t fall quickly, so central banks may not blink, China reopening,” said Emmanuel Cau, strategist at Barclays Plc. There will be a messy process and Europe will remain difficult.” ,
Concerns about a recession grew after data released on Thursday showed global factory activity contracted in November, with US manufacturing declining for the first time since May 2020.
The time has come for a back rate hike, according to Fed Chair Jerome Powell, who said that “slowing down at this point is a good way to balance risks.”
As US data reached a deflationary point in addition to Mr Powell’s overall dovish comments over the past few days, analysts at Commerzbank concluded there was sufficient justification for pricing in an aggressive rate hike.
Meanwhile, the Chinese yuan rose and was set for its biggest weekly gain since China revaluation of the currency in 2005, on hopes of an exit from China’s zero-COVID policy and an interest rate hike from the Fed. was increased slowly.
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