Sensex drops over 200 points, Nifty50 slides below 17,850; Infosys rises, HCL Tech falls

Indian equity benchmarks Sensex and Nifty50 gave up initial gains amid choppy trade on Friday, even as global markets strengthened after data showed inflation eased in the world's largest economy, taking away some of the concerns about steep hikes in interest rates. 

Both indices failed to stay in the positive zone in early deals after opening about 0.1 per cent higher. The Sensex fell as much as 217.9 points or 0.4 per cent to 59,740.2 in the first few minutes of trade, and the Nifty slid to as low as 17,802.1, down 56.2 points or 0.3 per cent from its previous close. 

At 9:27 am, the Sensex was down 213.9 points or 0.4 per cent at 59,744.2 and the 50-scrip index at 17,818.1, down 40.1 points or 0.2 per cent from its previous close. 

An equal number of stocks strengthened and weakened in the Nifty basket. UltraTech, Adani Enterprises, IndusInd Bank, Tata Steel, PowerGrid, NTPC, UPL and ONGC were the top gainers, rising between 0.5 per cent and 0.8 per cent. On the other hand, HCL Tech, Larsen & Toubro, Eicher, Tech Mahindra, Sun Pharmar, Apollo Hospitals and Reliance -- down between 0.8 per cent and 1.9 per cent -- were the top laggards.

Reliance and HDFC Bank were the biggest drags on both main gauges, accounting for almost 100 points in the fall in Sensex.

The Nifty IT -- whose 10 constituents include TCS, Infosys, HCL Tech, Wipro and Tech Mahindra -- declined a day after Infosys and HCL Tech reported their financial results for the October-December period. Infosys raised and HCL Tech trimmed the revenue guidance for the year ending March 2023. 

Overall market breadth favoured the bulls, as 1,708 stocks rose and 1,024 fell on BSE.

"There are significant near-term positives for equity markets. Globally, the decline in US inflation and the consequent decline in US 10-year bond yields are supportive of markets. The dollar index dipping below 103 is positive for emerging market equities. Sustained selling by FIIs in India is likely to abate going forward," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The RBI can now afford to soften rate hikes, he added.

The emerging interest rate scenario is favourable for banks and NBFCs. The impressive Q3 results from IT majors will keep the IT segment resilient.

Global markets

Equities in other Asian markets began the day in the green, with MSCI's broadest index of Asia Pacific shares outside Japan rising 0.5 per cent at the last count. 

S&P 500 futures were down 0.2 per cent, suggesting a muted start ahead on Wall Street. On Thursday, the S&P 500 finished 0.3 per cent higher, and the Dow Jones and the tech stocks-heavy Nasdaq Composite gained 0.6 per cent each, after the US inflation reading supported expectations of less aggressive rate hikes from the Fed.

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