Equity benchmark index Sensex tumbled 551 points to close below the 66,000 level on Wednesday due to profit-taking in banking, financial and energy stocks amid a sharp jump in global crude oil prices.
A sluggish trend in global equity markets following lingering geopolitical worries also sapped the risk appetite of investors, traders said.
After a day’s breather, the 30-share BSE Sensex plunged 551.07 points or 0.83% to settle at 65,877.02. During the day, it fell 585.99 points or 0.88% to 65,842.10.
The Nifty declined 140.40 points or 0.71% to 19,671.10.
“Profit booking ensued in Indian markets, spurred by weak global sentiments and escalating Middle East tensions. A sudden rise in the tension has led to instability in energy prices; Brent prices rapidly rose above $92.5 by the day’s closing time.
“The initial Q2 earnings disappointments by the IT and financials sector may have prompted attention in the domestic markets. All these factors are presumed to be a knee-jerk reaction as the total outlook on the domestic market is stable, underpinned by healthy Q2 result forecast and favourable fiscal position,” Vinod Nair, Head of Research at Geojit Financial Services, said.
Among the Sensex firms, Bajaj Finance fell by nearly 3%, the most among the 30 frontline companies. Bajaj Finserv, Axis Bank, HDFC Bank, Reliance Industries, NTPC, ICICI Bank and IndusInd Bank were the other major laggards.
“Fresh weakness in banking and financial majors combined with a downtick in other heavyweights like Reliance is pointing towards further slide,” said Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.
In contrast, Tata Motors, Sun Pharma, Maruti and Mahindra & Mahindra were the gainers.
“The market is showing early signs of fatigue within the mid and small-cap space and there is a clear investor shift to large caps and safe havens. While the geopolitical events have not yet cracked the Indian market, it has definitely slowed the momentum.”
“The Indian markets hence appear relatively better placed compared to its regional peers. U.S. markets have caught a bit of a tailwind with the Fed speakers highlighting that there is a lower need to raise rates going forward,” Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services, said.
In the broader market, the BSE midcap gauge declined 0.85% and smallcap index dipped 0.32%.
Among the sectoral indices, power declined by 1.45%, financial services fell by 1.20%, bankex (1.18%), utilities (1.08%), consumer durables (0.95%), oil & gas (0.78%) and services (0.70%).
Healthcare and auto were the gainers.
“Asia markets were mixed in choppy trading on Wednesday after economic data from China showed stronger-than-expected growth. European stocks inched lower on Wednesday as an explosion at a Gaza hospital complicated diplomatic efforts to rein in conflict in the Middle East,” Deepak Jasani, Head of Retail Research, HDFC Securities, said.
In Asian markets, Shanghai and Hong Kong ended in negative territory, while Seoul and Tokyo settled in the green.
European markets were trading lower. The U.S. markets ended on a mixed note on Tuesday.
Global oil benchmark Brent crude jumped 3.36% to $92.92 a barrel.
Foreign Institutional Investors (FIIs) bought equities worth ₹263.68 crore on Tuesday, according to exchange data.
The BSE benchmark had climbed 261.16 points or 0.39% to settle at 66,428.09 on Tuesday. The Nifty gained 79.75 points or 0.40% to 19,811.50.
