Rough tide

Nifty50: 17,629 ▼ 88 (-0.5%)
Sensex: 59,119 ▼ 337 (-0.5%)

Hello, people!

The markets dampened investors’ spirits today, so it’s probably a good time to take a break and recharge your energies. Just like this Bengaluru-based start-up which announced a 11-day break for its employees. No such luck at your workplace? Maybe you can just grab your cup of evening tea and relax. 

• Following weak global cues, markets closed lower for the second straight day. 
• In all, 28 of the Nifty50 stocks closed in the red. 
• The Bank of England raised interest rates by 50 bps to 2.25%, the biggest hike in 27 years. 

Among the Nifty sectoral indices, Media (+1.8%) and FMCG (+1.3%) saw the most gains, while Bank (-1.3%) and Realty (-0.2%) were the top losers.

What’s trending

⭐ Maruti Suzuki gains share in SUV segment

MARUTI (NSE): 9,419 ▲ 171 (+1.8%)

Shares of Maruti Suzuki were up by over 2% intraday. The latest SUVs launched by the company have seen strong demand from consumers. The management said that the company has cumulative bookings of 2.4 lakh units for its utility vehicles, worth nearly ₹35,000 crore.

⭐ DGCA extends flight cap on Spicejet

SPICEJET (NSE): 40 ▼ 1.3 (-3.2%)

Shares of Spicejet slipped 4% intraday after India’s aviation regulator DGCA extended the 8-week restriction on its flight cap till October 29. This means Spicejet will be allowed to operate a maximum 50% of its flights. In another development, the carrier said a salary hike of 20% will be given to pilots in October 2022. This salary revision follows a hike of 6%, which was announced last month.

⭐ Ashoka Buildcon wins new order

ASHOKA (NSE): 84.4 ▲ 1.9 (+2.3%)

Shares of construction firm Ashoka Buildcon rose by over 4.5% intraday following the announcement of a new order win. The new order comes from South Western Railway and is worth ₹258 crore. The project involves construction of a new broad-gauge line, including electrical and telecommunication works between Tolahunse and Bharmasagar stations in Karnataka.

⭐ Govt releases kharif report card

The Ministry of Agriculture has released its first advance production estimate for the kharif crops. Production of rice, which is the most important kharif crop, is expected to decline by 6% as compared to last year to 104.9 million tonnes mainly due to deficient rainfall in key rice-producing states. Further, the total production of pulses and cotton is estimated at 8.3 and 34.1 million tonnes respectively. Meanwhile, sugarcane and maize could see record production at 465 million tonnes and 23.1 million tonnes.

In Focus

Rupee goes tumbling

The Federal Reserve has announced a 75 bps (0.75%) interest rate hike in its latest move, which is the fourth rate increase since May 2022. Following the announcement, the Indian rupee tumbled to a record low of 80.8 against the dollar. In addition, the US Fed has signalled more interest rate hikes, which can potentially drag the rupee further. Wondering how the rupee fall will impact your lives? Let’s take a closer look.

The value of the rupee to the US dollar fluctuates based on demand and supply. Since India is dependent on imports of various goods, the demand for the dollar is always high. Hence, a falling rupee makes imported items including crude oil, metals and electronics costlier. In such scenarios, the cost of raw materials and production goes up, which ultimately gets passed on to the consumers, leading to more inflation.

A falling rupee also has a ripple effect on equity markets. As the rupee declines, foreign investors look to pull out funds from the Indian equities and move them to other countries like the US, leading to a sharp fall in the domestic equity markets.

Lastly, a weak rupee along with a prolonged period of high and rising inflation leaves the central bank with no choice but to raise interest rates, which increases the monthly EMIs of borrowers. So far this year, the Indian rupee has declined by over 8.3% against the US dollar. To restrict the rupee fall, RBI is actively intervening in the forex market, which has whittled India’s forex reserve to a two-year low of $550 billion.

So what’s in store for the rupee? Well, we’d have to flip a coin to answer that question.

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Good to know

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A hedge fund is an investment pool that is managed using a range of strategies to get higher returns than the markets. The fund tries to hedge the risk against market volatility by employing alternative investment approaches, which are often riskier. Generally, hedge funds require a high minimum investment. Thus, they are only accessible to high-net worth individuals and institutional investors.

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