Highlight
- Sensex and Nifty fell nearly 1 per cent on profit-booking in IT, banking and FMCG stocks
- Shares of Axis Bank fell by 3 per cent, Kotak Bank by 2.07 per cent and SBI by 0.67 per cent.
- Bajaj Finserv overcame the trend with a gain of 5.58 per cent
Benchmark BSE Sensex and Nifty fell nearly 1 per cent on Tuesday on profit-booking in IT, banking and FMCG stocks ahead of a potentially aggressive rate hike by the US Federal Reserve. Marking its second straight day of losses, the 30-share BSE benchmark settled 497.73 points or 0.89 per cent lower at 55,268.49, with 22 of its constituents ending in the red.
During the day, it fell 562.79 points, or 1 per cent, to a low of 55,203.43. The broader NSE Nifty fell 147.15 points or 0.88 per cent to 16,483.85, with 38 of its stocks succumbing to gains. The Nifty had gained over 5 per cent in the six-day rally till Friday. Among the Sensex stocks, IT major Infosys was the biggest loser of 3.4 per cent. Wipro fell by 2.28 per cent, HCL Tech by 1.74 per cent, Tech Mahindra by 1.68 per cent and TCS by 1.62 per cent.
Banking stocks too fell 3 per cent in Axis Bank, 2.07 per cent in Kotak Bank and 0.67 per cent in SBI. HDFC Twins and ICICI Bank also declined. HUL, Dr Reddy’s, L&T, Titan, Nestle, Tata Steel, Maruti and Sun Pharma were also among the losers. Bajaj Finserv, on the other hand, overcame the trend with a gain of 5.58 per cent. Bharti Airtel and Reliance Industries also moved ahead as the spectrum auction began on Tuesday.
Vinod Nair, head of research at Geojit Financial Services, said the Fed meeting, beginning Tuesday, is expected to sustain an aggressive rate hike of 75 bps (basis points) and bearish fears, especially in western markets. “Even though the domestic market is showing strength, the spillover effect from the western market is inevitable,” Nair said.
Analysts said investors are concerned that aggressive rate hikes by the US Fed and similar actions by central banks in Europe and Asia could stifle global economic growth. “Participants were in a profit-taking mood from the outset, resulting in a gradual decline in the index. Apart from mixed earnings, caution and GDP figures ahead of the US Fed meeting were also weighing on sentiment,” said Ajit Mishra, VP – Research, Religare Broking Ltd. said.
In the broader market, the BSE midcap gauge fell 1.21 per cent and the smallcap index fell 1.20 per cent. All sectoral indices on BSE declined, with IT down 2.84 per cent, followed by tech (2.23 per cent), FMCG (1.32 per cent). ) and capital goods (1.28 per cent). Siddharth Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd said, “Domestic equities witnessed sluggish momentum and traded in negative territory throughout the day amid weak global cues. Nifty opened flat and fell from an early tick.”
Global stock markets were mixed, reaching a four-decade high of 9.1 per cent ahead of expected sharp hike in interest rates by the US Federal Reserve to tame inflation. In Asia, markets declined marginally in Tokyo, while closed higher in Shanghai, Seoul and Hong Kong. European markets were mostly trading lower during mid-session deals. On Monday, US markets closed with a mixed trend. Meanwhile, international oil benchmark Brent crude jumped 1.38 per cent to 106.6 per barrel. Foreign institutional investors offloaded shares worth Rs 844.78 crore on Monday, according to exchange data.