Profit booking pares early gains, key indices end flat

Mumbai: Equity indices surrendered early gains to close flat on Thursday as profit-taking took hold amid a rally in global markets, even as the US Federal Reserve hiked rates on expected lines to combat inflation. Recovering after a severe drubbing in the previous session following the RBI's surprise rate hike, the 30-share BSE benchmark Sensex soared almost 900 points in opening trade.

However, the index lost momentum towards the fag-end to close just 33.20 points or 0.06 per cent higher at 55,702.23, snapping its three-session losing streak. On similar lines, the NSE Nifty inched up 5.05 points or 0.03 per cent to finish at 16,682.65.

Tech Mahindra topped the Sensex gainers' list with a jump of 4.07 per cent, followed by Infosys, HCL Tech, Wipro, Tata Steel, Kotak Mahindra Bank and TCS. In contrast, IndusInd Bank, Nestle, UltraTech Cement, Sun Pharma, Reliance Industries, PowerGrid, Bajaj Finserv and Titan were among the main laggards, losing as much as 4.32 per cent.

"The fear of an aggressive rate hike by the Fed was the prime reason for global volatility during the past few days. Fed's decision to remain less hawkish with a 50 bps rate hike downplayed the investors' worries, helping the global markets to rally. However, the domestic market trimmed its gains towards the end of the day following a sell-off in US futures," said Vinod Nair, head (research) at Geojit Financial Services.

Mitul Shah, head (research) at Reliance Securities, adds: "US equities rallied, recording the biggest one-day gain since 2020, after Federal Reserve comments suggested that the central bank is unlikely to consider a higher interest-rate hike of 75 basis points in the coming months.

Moreover, rate hike and balance sheet unwinding quantum was on expected line without any negative surprise, which was already factored in market correction over past few days. It was like a relief rally to some extent."

Foreign institutional investors (FIIs) offloaded shares worth Rs 3,288.18 crore on Wednesday, according to stock exchange data.

In the broader market, the BSE smallcap gauge dipped 0.32 per cent while the midcap index went down by 0.21 per cent. Sectorally, BSE power gained the most by 1.94 per cent, followed by IT (1.86 per cent), teck (1.81 per cent) and utilities (1.51 per cent). Among the laggards, realty fell by 1.57 per cent, healthcare 0.56 per cent, FMCG 0.51 per cent and energy 0.43 per cent.