Equity benchmark indices Sensex and Nifty buckled under heavy selling pressure on July 27 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 U.S. 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% to settle at 66,266.82, while Nifty declined 118.40 points or 0.60% to close at 19,659.90.
M&M was the biggest loser in the Sensex chart, falling 6.39%, 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%.
According to Vinod Nair, Head of Research at Geojit Financial Services, the U.S. 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 U.S. 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," Mr. Nair said.
The shares of the Mahindra group firms fell amid reports that M&M is looking to buy around 10% stake in RBL Bank.
Tech Mahindra on July 26 reported a 38% fall in June quarter net profit at ₹692.5 crore.
On the 50-stock index Nifty, as many as 21 closed the session in green while 29 ended in red.
In Asian markets, Hang Seng went up 1.41% and Japan's Nikkei was 0.68% higher. Chinese index Shenzhen was down 0.41% and Shanghai slipped 0.2%.
European markets were broadly higher with CAC 40 of France rising 1.35% while Germany's DAX gained 0.89%. The UK's FTSE 100 was up 0.30%.
In the U.S. market on July 26, S&P 500 closed 0.02% lower, while Dow Jones settled 0.23% higher.
Meanwhile, global oil benchmark Brent crude was trading 0.95% higher at $83.71 a barrel.
Foreign Institutional Investors (FIIs) were net buyers in the capital markets on July 26 as they bought shares worth ₹922.84 crore, according to exchange data.
Breaking its three-session losing run on July 26, the 30-share BSE Sensex climbed 351.49 points or 0.53% to settle at 66,707.20. The broader NSE Nifty advanced 97.70 points or 0.50% to end at 19,778.30.
