Markets tumble over 1% amid selling pressure in bank and financial stocks
Benchmark indices Sensex and Nifty tanked more than 1 per cent on Wednesday due to heavy selling pressure in banking and financial shares amid unabated foreign capital outflows.
The 30-share BSE barometer plunged by 773.69 points or 1.27 per cent to 60,205.06 as 22 of its scrips declined while eight advanced.
The index opened lower and later fell nearly 900 points during the day to touch a low of 60,081.36 as investors closed their positions on the last day of derivatives expiry.
The broader Nifty of the National Stock Exchange declined sharply by 226.35 points or 1.25 per cent to close below the 18,000 level at 17,891.95. As many as 35 of its scrips ended in the red and 15 gained.
“Indian equities witnessed a significant sell-off as the market appeared apprehensive ahead of the upcoming Union Budget and Fed meeting next week,” Vinod Nair, Head of Research at Geojit Financial Services, said.
“Sentiments were dampened by persistent FII selling, where funds are being shifted to other EMs as a result of attractive valuations. Furthermore, a weak economic growth outlook that stoked recession fears pulled down global markets,” Nair said.
Analysts said that traders offloaded stocks ahead of the Adani Enterprises Rs 20,000 crore FPO, while migration from T2 to T1 settlement starting on Friday also led to some selling.
“Markets plunged sharply lower on the monthly expiry day and ended with a cut of over a per cent. After the flat start, the Nifty index drifted gradually lower in the first half and remained in a narrow band thereafter,” Ajit Mishra, VP - Technical Research, Religare Broking, said.
Among Sensex stocks, SBI fell the most by 4.3 per cent. IndusInd Bank tanked by 4.26 per cent, HDFC Bank by 2.78 per cent and Axis Bank by 2.02 per cent. HDFC, Tech Mahindra, ICICI Bank, Ultratech Cement, L&T, Bajaj Finserv, Reliance, HCL Tech, Asian Paints, Wipro and M&M were among the major losers.
On the other hand, HUL advanced the most by 1.14 per cent. Maruti, Tata Steel, NTPC and Sun Pharma also posted gains.
In the broader market, BSE Midcap declined by 1.52 per cent while BSE Smallcap by 0.94 per cent.
Among sectoral indices, BSE Power plunged by 2.72 per cent, Utilities by 2.87 per cent, Bankex by 2.42 per cent, Financial Services by 2.11 per cent, Telecommunications by 2.06 per cent, Oil & Gas by 1.76 per cent, Realty 1.92 per cent, and Capital Goods by 1.06
Asian markets were mixed after the US stocks finished little changed. Japan’s benchmark Nikkei 225 gained 0.4 per cent and South Korea’s Kospi jumped 1.4 per cent, while markets in Hong Kong and Shanghai were closed for the Lunar New Year holidays.
European shares were also mixed with stock indices trading lower in Germany and France, while Britain’s FTSE 100 rose 0.1 per cent.
Brent crude, the international oil benchmark, declined by 0.31 per cent to $85.86 per barrel.
The rupee slipped 2 paise to close at 81.65 against the US dollar on Wednesday amid a strong American currency overseas and subdued market sentiments.