Domestic markets too slumped along with other Asian counterparts on Thursday after the US Federal Reserve talked about possibly reducing US economic stimulus. Besides, Japanese officials prepared to declare a coronavirus state of emergency during the Olympics, which also aggravated selling pressure.
The market opened on a negative note amid weak global cues. Indices slipped further in the second half amid selling pressure across all counters. Only IT stocks remained resilient in the second half ahead of the TCS Q1 FY2022, which is expected post-market hours.
The BSE Sensex closed at 52,568.94, down 485.82 points or 0.92 percent. It hit an intra-day high of 53,103.03 and a low of 52,428.84. The Nifty 50 closed at 15,727.90, down 151.75 points or 0.96 percent. It hit an intra-day high of 15,885.75. The index slipped below the 15,700-mark during the second half to hit an intra-day low of 15,682.90.
Breadth favors decliners
The breadth of the market turned negative with 1,738 stocks declining, 1,448 advancing and 144 remaining unchanged on the BSE. As many as 411 securities hit the upper circuit and 243 the lower circuit; 378 hit their 52-week high, while 17 touched a 52-week low.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities witnessed sharp correction amid weak global cues. The Hang Seng corrected over 2.5 percent today as investors dumped Chinese tech giants led by mounting concerns about regulatory risk.
Tech Mahindra, SBI Life, Eicher Motors, Bajaj Auto, and HCL Tech were the top gainers on the Nifty 50, while Tata Motors, JSW Steel, Hindalco, Tata Steel, and ONGC were the top laggards.
According to Narendra Solanki, Head-Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, the market started on a muted note with negative bias following downbeat Asian market peers, which were trading in the red amid regulatory fears resurfacing on tech stocks and cautious global sentiments.
“During the afternoon session, markets further fell and traded in the red as investors were concerned with a private report stating that India’s retail inflation is likely to accelerate to a seven-month high in June on rising food and fuel prices, staying above the Reserve Bank of India’s comfort zone for a second straight month,” said Solanki.
Sentiments were further impacted due to Fitch Ratings cutting India’s growth forecast to 10 percent for the current financial year (FY22), from 12.8 percent estimated earlier due to the impact of Covid-19.
According to Vinod Nair, Head of Research at Geojit Financial Services, “As we kickstart the Q1FY22 results season, initial releases of the IT sector and a good number of lucrative IPOs will be in focus for the coming weeks”.
IT resilient ahead of TCS results
On the sectoral front, all indices except Nifty IT were in the red.
Nifty Metal suffered the highest losses and was down 2.19 percent at closing.
Nifty Bank and Nifty Financial Services were down 1.39 percent and 1.22 percent, respectively.
Nifty Auto was down 0.91 percent, Nifty FMCG was down 0.74 percent and Nifty Pharma was down 1.27 percent. Nifty IT closed 0.05 percent higher.
“Selling pressure was seen across all the counters, while IT stocks broadly remained resilient ahead of TCS earnings today. Metals and financials witnessed steeper correction,” said Modi.
As for the broader indices, midcaps also witnessed selling pressure, while the small-caps were trading flat. The Nifty Midcap 50 was down 0.73 percent, while the Nifty Smallcap 50 was up 0.01 percent.
The S&P BSE Midcap was down 0.37 percent, while the S&P BSE Smallcap was down 0.09 percent.
Notably, the volatility index rose 11.03 percent to 13.56.