Downslide

Nifty50: 17,530 ▼ 346 (-1.9%)
Sensex: 58,840 ▼ 1093 (-1.8%)

Greetings, folks!

If the news of Roger Federer retiring from international tennis disappointed fans on Thursday, markets collapsing like a pack of cards didn’t help much on Friday. TGIF, and we have the weekend to cheer ourselves up.

• Following weak global cues, markets closed lower for the third straight day. 
• In all, 48 of the Nifty50 stocks closed in the red. 
• Inflation in the Eurozone rose to 9.1% in August from 8.9% in July.

All of the Nifty sectoral indices closed in the negative, with Media (-4.0%) and Realty (-3.7%) witnessing maximum losses.

What’s trending

⭐ Maruti to ramp up exports

MARUTI  (NSE): 9,173 ▼ 36 (-0.3%)

Auto major Maruti Suzuki is planning to ramp up its exports of vehicles and components to ₹20,000 crore in the next three years. The company’s exports accounted for nearly 40% of the total vehicle exports from the country in FY22. India's vehicle export market grew 42% in FY22 and Maruti's export volumes jumped 147%. 

⭐ Adani Ports to develop Haldia port

ADANIPORTS (NSE): 940 ▼ 27 (-2.8%)

HDC Bulk Terminal Ltd (HBTL), a wholly owned subsidiary of Adani Ports, has signed an agreement for the mechanisation of berth number 2 at Haldia Port in Kolkata. According to the agreement, HBTL will get the rights to design, build, finance, operate, maintain and manage the bulk terminal with a capacity of 3.74 million tonnes per annum for 30 years. The estimated cost of the project is ₹298 crore.

⭐ Vedanta tumbles after chip plant clarification

VEDL (NSE): 290 ▼ 24 (-7.6%)

The mining major has issued a clarification that the proposed semiconductor business will fall under its holding company Volcan Investments. This comes after reports claimed that the company will set up a chip manufacturing plant in Gujarat through a joint venture with Foxconn. This plant is expected to roll out products in two years. 

⭐ Gold loses its shine after import price cut

The Indian government slashed the base import prices of gold along with other commodities on Thursday. Gold prices are down by about ₹1,500 so far this week, trading near their 6-months lows. Gold futures on MCX fell for the 4th consecutive day and closed at ₹49,096 per 10 grams (as of 6pm on 16 September).

In Focus

Markets crumble under inflation pressure

Just two days after touching their five-month highs, Indian markets plunged over 3% in the last three trading sessions. At the same time, the market volatility shot up by over 11% this week. What led to this market meltdown? Let’s find out.

First, the US inflation rate for August 2022 came in at 8.3%, above the market forecast of 8.1%. Meanwhile, subdued retail sales growth of 0.3% in the US, points to inflationary pressure on consumers.

These factors could prompt the US Federal Reserve to raise interest rates at its meeting scheduled on 20-21 September.

Amid this, investors have turned overly cautious, leading to a fall in the US markets, which has had a rub-off effect on Indian markets as well. 

Another key factor that led to a negative trend in domestic markets is the weakness in the rupee. During the week, the Indian rupee tumbled by over 30 paise against the US dollar, which has strengthened against most global currencies.

Besides this, the World Bank in its new report stated that there are chances of a global recession next year. It also expects a simultaneous tightening of monetary policy by central banks, which also had a negative impact on markets.

As a result, bears had an upper hand throughout the week. Nevertheless, bulls could once again take charge if investors' sentiments improve in the upcoming weeks.

IPO corner

The IPO of precision engineering products maker Harsha Engineers International received a strong response from investors. The public issue was subscribed around 74 times. While the portion for retail investors was subscribed around 17 times, the quota for qualified institutional buyers was subscribed 178 times. 

Good to know

What is RSI divergence?

RSI divergence indicates that the price action and the relative strength index (RSI) is showing the same momentum. It is a leading indicator of change in the trend. A positive divergence happens when the price makes a lower low but the RSI makes a higher low, indicating that the price fall has lost its momentum. Similarly, a negative divergence is seen when the price makes a higher high, but RSI makes a lower high.  

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