Opening Bell: Nifty near 17,700, Sensex drops nearly 300 points; banking, IT stocks top laggards

The Indian markets opened negative in line with trends on the SGX Nifty as weak global cues continued to trigger volatility in the domestic equity market. SGX Nifty dropped more than 100 points on the Singaporean exchange just before opening of the Indian market.  

The benchmarks dropped nearly half per cent lower in the opening trade as Fed minutes hinted at an aggressive interest rate hike. The Nifty 50 opened at 17,723.30 and the S&P BSE Sensex started at 59,402.61 on Thursday. 

Nifty mid cap and small cap indices outperformed benchmarks as they rose 0.2% and 0.4% respectively in the opening trade. India VIX was seen trading above 19-mark.  

The Nifty Bank slumped nearly 200 points to open near 37,400 as banking stocks remained under pressure on Thursday,   

Sectorally, pharma, healthcare, realty, FMCG and media stocks witnessed buying interest, while banking, IT and financial stocks dragged the market.  

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said markets, globally, have again turned choppy with sharp rise in the volatility indices.

"Recent market weakness is partly due to the increasingly hawkish commentary from the Fed. Market now expects  the Fed to hike rate by 50 bp in its next meeting and around 200 bp hike for 2022. This along with the expected  balance sheet reduction of the Fed will be a headwind for equity markets globally. Whether the markets can remain resilient even amidst this strong headwind depends on the Fed's ability to manage a 'soft landing' of the US economy preventing it from slipping into recession," said Vijaykumar,

He said there is a significant recent trend in the Indian market shows midcaps outperforming the large caps by around 3% so far this month. "This trend is likely to continue," he adds. 

Meanwhile, among the stocks, Cipla, Divis Laboratories, Dr Reddy's, Sun Pharma, Adani Ports, Asian Paints, Power Grid and NTPC gained in a negative market. HDFC, UPL, HDFC Bank, Wipro, ONGC, Titan, TCS and L&T were among top losers.  

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In the pre-opening, the Sensex dropped more than 200 points as 24 shares declined and only six advanced on the 30-share Sensex.  

"Nifty closed lower at 17,808 on Wednesday, while the VIX ended higher at ~19-level. The Index witnessed a second straight day of profit booking on expected lines and ‘buy-ondips’ stance shall remain in effect as long as the Index sustains above 17,800-17,700-zone. Time and price resistance on the upside is placed at 18,200-18,300-zone and it remains imperative for the Index to move above the same along with open interest participation for a move towards fresh highs," said Viraj Vyas, Technical and Derivatives analyst at Ashika Broking. 

Earlier, Asian shares retreated on Thursday in line with a global selloff, as markets were spooked by more aggressive noises from U.S. policymakers about the need for tighter monetary policy, which also kept the dollar near a two-year peak, said Reuters  

MSCI`s broadest index of Asia-Pacific shares outside Japan fell 0.53% and Japan`s Nikkei dropped 1.9%. SGX Nifty Futures dropped nearly 100 points on the Singaporean exchange in the early trade on Thursday, hinting at negative opening for the market.  

On Wednesday, all three major U.S. benchmarks fell with the Nasdaq Composite worst hit, losing 2.22%. In Asia trade S&P 500 futures fell 0.26% and Nasdaq futures fell 0.22%. 

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