MUMBAI, July 27 (PTI): 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.
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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 RIL.
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.
“Fed’s statement today left the door open for an additional hike, but the final decision will depend on how the economic data evolves between now and then. It noted that its rate-setting committee “remains highly attentive to inflation risks,” Devarsh Vakil – Deputy Head of Retail Research, HDFC Securities, said.
Asian equities rose on growing speculation the US Federal Reserve is close to the end of hiking interest rates after the central bank said any further tightening would be data-dependent. Major equity indices advanced across the region, with Hong Kong-listed technology stocks leading gains, Vakil said.
In Asian markets, Hang Seng went up 1.41 per cent and Japan’s Nikkei was 0.68 per cent higher. Chinese index Shenzhen was down 0.41 per cent and Shanghai slipped 0.2 per cent.
European markets were broadly higher with CAC 40 of France rising 1.35 per cent while Germany’s DAX gained 0.89 per cent. The UK’s FTSE 100 was up 0.30 per cent.
In the US market on Wednesday, S&P 500 closed 0.02 per cent lower, while Dow Jones settled 0.23 per cent higher.
Meanwhile, global oil benchmark Brent crude was trading 0.95 per cent higher at USD 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.
Breaking its three-session losing run on Wednesday, the 30-share BSE Sensex climbed 351.49 points or 0.53 per cent to settle at 66,707.20. The broader NSE Nifty advanced 97.70 points or 0.50 per cent to end at 19,778.30.
Cautiousness was seen in the market ahead of the ECB and BoJ interest rate decision due today. The market is likely to consolidate given no clarity given by the US Fed on its future course of action, leading to mixed global cues. Overall strength continues in the market, with the likelihood of consolidation at higher levels, Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, said.
