Indian equity benchmarks Sensex and Nifty50 reversed initial gains soon after a positive start on Tuesday, amid weakness across global markets following hawkish remarks from Fed officials. Losses in financial and IT shares weighed on Dalal Street, though gains in auto and metal counters arrested the fall.

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The 30-scrip index fell by as much as 231.8 points or 0.4 per cent to 60,515.5 and the Nifty50 slid to as low as 18,040.9, down 60.4 points or 0.3 per cent from its previous close. Both headline indices had edged higher at the open, with the Sensex starting the day up up 57.8 points at 60,805.1 and the Nifty50 at 18,121.3, up 20.1 points from its previous close. 

At 9:25 am, the Sensex was down 213.7 points at 60,533.6 and the Nifty50 less than four points shy of the 18,050 level.

A total of 29 stocks in the Nifty50 basket struggled below the flatline. TCS was the top laggard, trading 1.9 per cent lower, a day after the country's largest IT firm reported its financial results for the October-December period. Infosys, Britannia, Hero MotoCorp, Eicher, HDFC Bank, HDFC, SBI and ITC, trading between 0.6 per cent and 1.2 per cent lower, were some of the other worst-hit blue-chip stocks.

On the other hand, Tata Motors, Hindalco, Tata Steel, JSW Steel, PowerGrid, Apollo Hospitals, ONGC and Mahindra & Mahindra -- trading between 0.8 per cent and 4.8 per cent higher -- were the top gainers.

TCS, HDFC Bank and Infosys were the biggest drags on both main gauges, accounting for a loss of more than 150 points in Sensex.

The Nifty IT -- whose 10 constituents include IT majors TCS, Infosys and Wipro -- was the top laggard among NSE's sectoral gauges. 

Index Change (%)
Nifty IT -1.4
Nifty PSU Bank -1.3
Nifty Bank -0.8
Nifty Pvt Bank -0.7
Nifty Financial Services -0.7
Nifty FMCG -0.3
Nifty Consumer Durables -0.2
Nifty Media 0.0
Nifty Realty 0.1
Nifty Oil & Gas 0.1
Nifty Pharma 0.1
Nifty Healthcare 0.2
Nifty Metal 0.6
Nifty Auto 0.7

Overall market breadth was neutral, as 1,391 stocks rose and 1,394 fell in morning deals on BSE.

Analysts awaited a speech by Fed Chairman Jerome Powell scheduled on Tuesday for clues on the path of rate hikes in the world's largest economy. "The Fed Chair is unlikely to depart from the central bank’s hawkish stance but if CPI data of Wednesday confirms the declining trend in inflation, the market will get ahead of the Fed and will start pricing in a terminal rate below five per cent and possible rate cuts by end-2023," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"If inflation continues to remain high, there can be a sell-off in the market discounting higher rates and a hard landing for the US economy. Investors may wait for these crucial inputs before taking a call on near-term market trends," he said.

Global markets

Equities in other Asian markets fell following a largely weak handover from Wall Street after comments from two Fed officials turned investors cautious ahead of key US inflation data. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.3 per cent at the last count.

Japan's Nikkei 225 was up 0.8 per cent, as the market returned to trade after a holiday, but Hong Kong's Hang Seng was down 0.3 per cent and China's Shanghai Composite down 0.2 per cent.

S&P 500 futures were down 0.3 per cent, suggesting a weak start ahead in the US. On Monday, the Dow Jones finished 0.3 per cent lower and the S&P 500 declined 0.1 per cent though the tech stocks-heavy Nasdaq Composite rose 0.6 per cent.

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