Photo by Wance Paleri on Unsplash

After opening the day deep in the red, Indian share markets continued their downtrend and ended 1.5% lower.

Benchmark indices fell as all sectors came under pressure. The selling was led by IT and realty stocks, taking cues from US Federal Reserve signaling aggressive rate hikes.

At the closing bell, the BSE Sensex stood lower by 861 points (down 1.5%).

Meanwhile, the NSE Nifty closed down by 246 points (down 1.4%).

Maruti Suzuki, Asian Paints, and Nestle were among the top gainers today.

Tech Mahindra, Infosys, and Wipro, on the other hand, were among the top losers today.

The SGX Nifty was trading at 17380, down by 278 points, at the time of writing.

The broader markets ended on a negative note. The BSE MidCap was down 0.8% and the BSE SmallCap index ended lower by 0.6%.

Sectoral indices ended on a mixed note with stocks in the energy sector, oil and gas sector, and FMCG sector witnessing maximum buying interest.

On the other hand, stocks in the IT and finance sectors witnessed selling pressure.

IT stocks fell once again mirroring the huge fall on the Nasdaq index.

Most of the steel stocks in India also ended on a negative note. Companies in the steel sector are waiting for the government to withdraw export duty so they can proceed further with their capex plans.

Shares of Adani Transmission and Adani Total Gas hit their 52-week highs today.

Sun Pharma, Reliance, and Infosys were amongst the most active shares on the BSE today.

Asian stock markets ended on a mixed note. The Nikkei ended the day lower by 2.7%, while the Hang Seng inched higher by 0.7%. The Shanghai Composite ended 0.1% higher.

The rupee is trading at 79.9 against the US$.

Gold prices for the latest contract on MCX are trading up by 0.6% at Rs 51,238 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading down by 1.7% at Rs 55,770 per 1 kg.

Here are five reasons why Indian share markets fell today.
 

#1 Fed Chair Powell's Hawkish Pivot

Powell turned hawkish in his 9-minute address event, which made it clear that the central bank is not looking forward to backing off from raising rates.

Here's an excerpt of what he said,

Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.
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#2 Recession Fears

Powell's comments on inflation triggered renewed fears of an impending recession.

While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.

#3 Weak Global Markets

Post the speech, US markets plunged sharply. The tech-heavy Nasdaq led the decline among the three US benchmarks, recording its worst daily performance since 16 June by falling nearly 4%.

The futures of the frontline indices were also steeply lower in after-market hours.

Asian markets caught on the same trend today. Japan's Nikkei and Hong Kong's Hang Seng tanked up to 2.9% today.

#4 Depreciating Rupee

The rupee has been falling for quite some time now. But today, it recorded its all-time low on the back of strong demand for the dollar. The rupee depreciated by 24 paise to 80.11 against the dollar, tracking overnight weakness in the greenback.

The rupee's depreciation often leads to the discontinuation of FPI buying in India. This brings us to our final reason.
 

#5 Crude Oil Prices Rise

Over the last few days, the long strides in the oil markets have dented investors' confidence. The benchmark Brent crude, which dropped to $92, was again trading above $100.

The prices, though, came down after Powell's speech but not enough to alleviate concerns about a rise in raw material prices and their impact on India's fiscal math.

In news from the defense sector, Mazagon Dock Shipbuilders was among the top buzzing stocks today.

The share price of Mazagon Dock Shipbuilders surged more than 12% today after the government approved a list of 780 items to be produced domestically.

Union Defense Minister Rajnath Singh on Sunday approved the third positive indigenous list after a ban on their import kicked in under a staggered timeline of around six years.

Mazagon is one of India's four strategic defense shipyards and the only one to manufacture destroyers and submarines in India.

The company recently reported stellar performance for the June 2022 quarter. The company reported the highest-ever net profit of Rs 2.2 bn, up 134% YoY from Rs 930 m in 2021.

The company bagged 2 orders from the Container Corporation of India to manufacture 2,500 shipping containers. It also developed 6 pax, hydrogen fuel cell powered electric vessel in collaboration with Tata Advanced Systems.

For the financial year 2023, the order book of the company stands at Rs 433 bn. It comprises four 15 Bravo missile guided destroyers, four 17 Alpha Stealth Frigates, and six submarines, of which four are already delivered.

Speaking of the defense sector, note that finance minister Nirmala Sitharaman had announced in her Budget of 2022-23 that the defense research and development space will be opened for the industry, start-ups, and academia and 25% of the defense R&D budget has also been earmarked for this purpose.

The Indian government is likely to spend a massive US$130 bn over the next 7-8 years on the modernization of the armed forces.

This has given a big boost to the indigenization of defense procurement.

Increasing Budget Allocation to Defence (in US$ billion)

The increase in budgetary allocation, along with other factors, will ensure that India's top defense stocks remain in the limelight for the foreseeable future.

This has made companies in the defense sector potential multi-baggers in the coming years.

Moving on to the news from the retail sector, Reliance Retail is set to foray into the evergreen FMCG sector in India.

Today, at the 45^th AGM (Annual General Meeting), Reliance Retail, the retail arm of oil-to-telecom conglomerate Reliance Industries announced its entry in the FMCG sector.

Director of Reliance Retail, Isha Ambani, said,

I am excited to announce that this year, we will launch our fast-moving consumer goods business. The objective of this business is to develop and deliver high quality, affordable products which solve every Indian's daily needs.

The AGM has a bunch of major announcements from 5G to green hydrogen and more.

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