Sensex tanks 440.38 pts as investors pared exposure to bellwether stocks

Mumbai: Equity benchmark indices Sensex and Nifty buckled under heavy selling pressure on Thursday as investors pared exposure to bellwether stocks HDFC Bank, M&M, Nestle and Reliance Industries amid a mixed trend in global markets.

Besides, the interest rate hike by the US Fed failed to boost sentiments in the domestic market, which saw a steep decline led by banking and auto stocks, traders said.

After opening with gains of over 125 points, BSE Sensex plunged 440.38 points or 0.66 per cent to settle at 66,266.82, while Nifty declined 118.40 points or 0.60 per cent to close at 19,659.90.

M&M was the biggest loser in the Sensex chart, falling 6.39 per cent, followed by Tech Mahindra, Nestle India, Bajaj Finance, Axis Bank, ITC, JSW Steel, HDFC Bank and Reliance Industries Ltd.

On the other hand, Sun Pharma, Tata Motors, Bharti Airtel, L&T and Infosys were among the winners, rising up to 2.10 per cent.

“Markets witnessed wild gyration on the expiry day as the US Fed signalling one more rate hike dampened the sentiment and prompted investors to book profit in automobile, banking and oil & gas shares.

“However, realty and pharma shares were in the limelight after the recent correction. Many investors are not comfortable with the current valuations, and hence are redeeming their investment on every possible opportunity,” Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd, said.

The shares of the Mahindra group firms fell amid reports that M&M is looking to buy around a 10 per cent stake in RBL Bank.

Nestle India Ltd on Thursday reported an increase of 36.86 per cent in its net profit at Rs 698.34 crore for the second quarter ended June 30, 2023.

Tech Mahindra on Wednesday reported a 38 per cent fall in June quarter net profit at Rs 692.5 crore.

According to Vinod Nair, Head of Research at Geojit Financial Services, the US Federal Reserve’s interest rate move, which triggered positive cues globally, failed to boost the sentiment in the domestic market, which saw a sharp correction led by banking and auto stocks.

“The FOMC’s decision aligned with market expectations as they implemented a 25 bps hike and expressed a data-centric approach for future rate actions. Positive global sentiment prevailed due to the reduced prospects of a US recession. Despite this, the domestic market witnessed sharp corrections led by banks and autos, while pharma stocks performed on a positive start to their earnings season,” Nair said.

On the 50-stock index Nifty, as many as 21 closed the session in the green, while 29 ended in red.

Profit booking was the order of the day as investors preferred to book profit after the US Fed delivered a 25 bps rate hike yesterday. The benchmarks ended the expiry day on an uninspiring note, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd,

said.

In the broader market, the BSE midcap gauge climbed 0.48 per cent and smallcap index inched up 0.07 per cent.

Among sectoral indices, the auto index fell 1.28 per cent, oil & gas declined 1.09 per cent, while the bankex slipped 0.77 per cent and energy went down 0.85 per cent.

In contrast, healthcare rallied 2.39 per cent, realty jumped 2.11 per cent, telecommunication went up 0.40 per cent, and capital goods rose 0.31 per cent.

The rupee gained 9 paise to close at 81.92 against the US dollar on Thursday, tracking the weakness of the American currency in the overseas market after the US Fed raised interest rates on expected lines.

Meanwhile, global oil benchmark Brent crude was trading 0.95 per cent higher at $83.71 a barrel.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Wednesday as they bought shares worth Rs 922.84 crore, according to exchange data.