After long years of underperformance, stocks of govt-owned companies have started showing outperformance. CPSE ETF is the best way to bet on PSU stocks, said an analyst.
“Risk sentiments are getting bogged down by too many moving pieces – China power situation & its impact on supply chain and inflation, taper and bond yields and the EU gas crisis. Evergrande is still hanging like a Damocles sword. Most of these are very unpredictable in nature and hence risk sentiments are getting bogged down,” said Sageraj Bariya, Vice President – Institutional Sales, East India Securities.
How are bluechips doing
After opening in the red, benchmark indices slipped further lower. At 9.34 am, BSE flagship Sensex was down 88 points or 0.15 per cent to 59,326. NSE benchmark Nifty declined 27 points or 0.15 per cent to 17,684.
“For Nifty, 17,600 could be seen as the nearest support while near term resistance could be seen around 18,000 levels,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Adani Ports was the biggest gainer, up 1.81 per cent. Dr Reddy’s Labs, Coal India, Tata Steel, Tata Motors, Bajaj Finserv and Wipro were among other gainers.
PowerGrid was the top loser in the pack, down 1.59 per cent. ONGC, Bajaj Auto, Indian Oil, Eicher Motors, Kotak Mahindra Bank, Cipla and Tata Consumer were among those that traded in the red.
FACTORS DRIVING MARKETS
Good news
Inflation transitory?: Supply constraints thwarting global economic growth could still get worse, keeping inflation elevated longer, even if the current spike in prices is still likely to remain temporary, the world’s top central bankers warned on Wednesday.
Bad news
US default?: US lawmakers continue to wrangle over funding the government but face a Friday deadline to prevent a shutdown approached, something that also capped gains in US equities overnight.
Evergrande crisis: The company was due to pay interest on a dollar bond on Wednesday, but Reuters reported that some offshore bondholders had not been paid interest by the end of the Asian day.
Dollar strong: The dollar index – which measures the US currency against six major currencies – hit its strongest level in nearly 18 months against the yen and in 14 months against the euro. It held these gains in Asian hours, and was last at 94.314.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.57 per cent while Nifty Midcap declined 0.27 per cent. Broadest index on NSE, Nifty 500, was down 0.06 per cent.
Maharashtra Bank, Lakshmi Organic, IDBI, Bank of India, Oberoi Realty and Canara Bank were gainers from the space while L&T Tech Services, Cummins India, GSPL, KPIT Tech, Fine Organics and Bajaj Electricals were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.06 per cent, while the Nikkei lost 0.36 per cent. Hong Kong stocks fell 1 per cent but these were largely balanced by a 1.1 per cent rise in Australia.
Chinese blue chips gained 0.5 per cent after data published early on Thursday showed China’s services sector returned to expansion in September after COVID-19 outbreaks receded.
