Opening Bell: Nifty slips below 17,600, Sensex drops more than 300 points; IT, banking stocks worst hit

In line with SGX Nifty trends, the Indian market extended losses for the second day on Tuesday ahead of US inflation data and ECP meeting even as TCS q4 results came on expected lines on Monday. SGX Nifty Futures index was trading lower by more than 170 points on the Singaporean exchange ahead of the domestic market opening. Tracking their Asian peers, the broader Nifty50 slipped below 17,600, while the Sensex dropped more than 200 points to open at 17,584.85 and 58,743.50 respectively. The indices further slid as benchmarks dropped by more than 0.6% soon after the opening.  

Following benchmarks, Nifty midcap and small cap indices too opened marginally lower in the red. 

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Sectorally, pharma, healthcare, oil & gas and media traded with positive bias, while the rest of the other sectors were seen trading in the red. IT and banking & financial stocks were the worst hit.  

"Market will continue to be choppy in the near- term pulled up and down by positive and negative news. The near-term headwind continues to be the rising US bond yields, which has crossed 2.8 percent for the 10-year and outflows from equity," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The expert said that the tech-heavy NASDAQ has turned distinctly weak and this has led to some profit booking in Indian IT stocks too. "But IT is likely to do well as TCS results indicate robust deal wins and order flows. TCS results are in line and marginally above expectations. This can support IT stocks even if there is some profit booking. Results of leading financials will be better. This along with good expected performance from telecom, oil and gas, metals, pharma and chemicals will lead to buying on dips imparting resilience to markets," added V K Vijayakumar.

Meanwhile, in the pre-open, the Sensex declined more than 200 points as only eight shares advanced, one remained neutral and 21 declined on the 30-share index.  

"The Index traded in a narrow band (inside the range of the previous day) on Monday, which hints some cool-off in volatility. The 17,800-level continues to act as a resistance on the upside, while 17,600-level will act as a momentum support on the downside," says Viraj Vyas, Technical and Derivatives analyst at Ashika Broking 

Continuing to spend more time below 17,800-level doesn’t augur well for the Index and it remains imperative for the Index to demonstrate price intensity with meaningful OI addition to witness a directional breakout, he adds.  

Earlier, Asian markets were trading negative in Tuesday's morning trade amid weak global cues.  

Asian indices were trading negative to mixed in the morning trade as Japanese Nikkei 225 was trading lower by nearly 1.5%, Chinese Shanghai Composite 0.2% and Hang Seng Index at the Hong Kong Exchange was up 0.25% in the early trade on Tuesday.  

On Friday on the Wall Street, the Dow Jones Industrial Average fell 1.19%, the S&P 500 lost 1.69% and the Nasdaq Composite dropped 2.18%. All 11 S&P 500 sectors fell.