Markets Update: Sensex, Nifty50 down almost 1.5% amid global sell-off – IT, banking stocks drag

After showing strength for 4 days, the Indian markets are trading on a lower note amid weak global cues and hawkish US Reserve Fed minutes. The Sensex tumbled around 900 points, while the Nifty50 slipped below the 17700-mark intraday, dragged by the IT and banking stocks on Thursday. 

At around 12:08 pm, the BSE Sensex down over 840 points or 1.39 per cent to 59391, and Nifty50 down over 242 points or 1.35 per cent to the 17682 mark intraday. Outperforming the benchmarks, the broader markets are trading lower as mid-cap down 0.5 per cent and small-cap down 0.14 per cent. 

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The market is trading weak on multiple lowers, from weak global cues to rising cases of covid due to a new variant of Omicron. Besides, the Federal Reserve minutes indicate tapering followed by a rate hike from as early as March which makes markets very vulnerable to withdrawal of easy liquidity. 

Mere 6 stocks are in the green, while 44 are in the red on the Nifty50 intraday. Adani Ports is the top laggard intraday, down over 3 per cent, followed by JSW Steel, Infosys, HCL Tech each down around 2.4 per cent, while Tech Mahindra, HDFC and Kotak Bank slipper over 2 per cent each intraday. 

Index heavyweights Reliance Industries and HDFC Bank are mainly leading the decline in the market as each down around 2 per cent.  

Bharti Airtel, on the contrary, surged almost 3 per cent, to become a top gainer in an otherwise negative market, followed by UPL up almost 2 per cent, post bullish note by global brokerage firm CLSA. Other stocks such as Hindalco, Bajaj Auto, Maruti, Coal India each up marginally. 

Sectorally, all indices are weak except for Nifty Media gaining marginally. Nifty IT slumped most by over 2 per cent, followed by Nifty Bank and Financial services. Similarly, FMCG, Metal, Pharma also contributed to the markets fall, while Nifty Realty is dragging the broader markets intraday. 

Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW Private Equity said, “The market has been facing downward pressure post touching its all-time high in October. While, the economy has been recovering on expected lines, the global cues indicating the unwinding of balance sheet expansion by central banks around the world have been a major factor.”

In this context, the US Fed’s hawkish stance has not been a surprise, but the negative market reaction today is primarily due to the indication of balance sheet reduction in the Fed minutes released on Wednesday, Ralhan said in his mid-market comment.

In addition, the rising cases of COVID-19 around the globe has also increased the risk levels. Overall, we remain cautious in the markets right now, the managing partner at TIW Private Equity also said.