Weekly market update, Sep 23, 2022

India’s stock benchmarks declined for the second straight week as investors weighed a tighter monetary policy and a slowing global economy. The Sensex and Nifty 50 gained in the first two sessions of the week before falling in each of the last three sessions, with the decline intensifying towards the end of the week after the U.S. Federal Reserve announced a 75-basis-point rate hike and made hawkish commentary. The Sensex and Nifty lost 1.26% and 1.15%, respectively. Among the broader indices, the BSE Midcap and Smallcap closed lower by 1.12% and 1.32%, respectively. On the sectoral front, Realty, PSU banks, banking, metal stocks declined, while FMCG and pharma rose in the volatile week.

According to market analysts, The domestic stock market may face volatility amid monthly derivatives expiry scheduled in the coming week, while investors would mainly await the outcome of RBI’s interest rate decision on Friday. Global market movement would also continue to drive sentiment amid a bearish trend recently following rate hikes by the US Federal Reserve and other central banks. The Reserve Bank of India (RBI) may take cues from its global counterparts to raise interest rate for the fourth time in a row to control inflation. The RBI, which has raised the short-term lending rate (repo) by 140 basis points (bps) since May 22, may again go for a 50 basis points increase to take it to a three-year high of 5.9 per cent.

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