Sensex tumbles below 73k

Selling Across The Board

• Sensex 906.07 pts or 1.23% to 72,761.89
• During the day, Sensex dropped 1,152.25 pts or 1.56% to 72,515.71
• Nifty plummeted 338 pts or 1.51% to 21,997.70
• Power Grid, NTPC, Tata Steel, Tata Motors, JSW Steel, Airtel, Titan, RIL and HUL were major laggards
• ITC, ICICI Bank, Kotak Mahindra Bank, Nestle, Bajaj Finance and HDFC Bank among gainers
• BSE small-cap gauge tanked by 5.11%
• Mid-cap index declined by 4.20%
• Adani group’s mcap fall by Rs1.12 lakh cr

Mumbai: Equity benchmark index Sensex on Wednesday crashed over 900 points to sink below the 73,000 level due to widespread selling pressure amid a sharp fall in small-cap and mid-cap indices. Besides, deep losses in utility, energy and metal stocks and recent selling by foreign investors added to the gloom, analysts said. Benchmark indices started the session on a positive note, but the selling intensified during afternoon trade, with all sectoral indices ending in the red.

The 30-share index tanked 906.07 points or 1.23 per cent to settle at 72,761.89. During the day, it dropped 1,152.25 points or 1.56 per cent to 72,515.71. The Nifty plummeted 338 points or 1.51 per cent to 21,997.70.

“In contrast to the global uptrend, the unfavourable risk-reward balance of mid- and small-cap stocks, fuelled by prolonged premium valuations, has aggravated the downfall. Meanwhile, FMCG and contrarian plays like gold are offering some refuge. Other than the premium valuation no fundamental issue is noticed to drawback the long-term growth image of domestic midcaps,” said Vinod Nair, head (research), Geojit Financial Services.

Meanwhile, industry veteran Uday Kotak on Wednesday said there may be some early froth, and it may be a little bubbly, but the markets are not out of control.

“Globally, the persistent US inflation rate has cast doubt on the Fed’s ability to implement imminent rate cuts. While domestic inflation appears to be showing signs of easing. However, the easing trend in global commodity prices may prompt central banks to consider rate cuts in the latter half of 2024, which could be positive for equity,” Nair said.

In the broader market, the BSE smallcap gauge tanked by 5.11 per cent, while the midcap index declined by 4.20 per cent. All the indices ended in the red, with utilities tumbling 7.21 per cent, metal dropping by 5.75 per cent, services (5.71 per cent), telecommunication (5.45 per cent), oil & gas (5.16 per cent), commodities (4.28 per cent) and industrials (4.23 per cent). A total of 3,516 stocks declined, while 400 advanced and 60 remained unchanged on BSE.

Power Grid was the biggest loser in the Sensex pack, sliding over 7 per cent, followed by NTPC, Tata Steel, Tata Motors, JSW Steel, Bharti Airtel, Titan, Reliance Industries and Hindustan Unilever. In contrast, ITC, ICICI Bank, Kotak Mahindra Bank, Nestle, Bajaj Finance and HDFC Bank were the gainers.

The statement from Kotak comes two days after Sebi chairperson Madhabi Puri Buch had said that there are pockets of froth in the small and mid-cap stocks, and the regulator is looking into the same to come out with a possible consultation paper.

“It may not be appropriate to allow the bubble to keep building, because when it bursts, they impact the investors adversely. That is not a good thing,” Buch had said.

In Asian markets, Seoul settled in the green, while Tokyo, Shanghai and Hong Kong ended lower. European markets were trading mostly in the green. The US markets ended with significant gains on Tuesday.

Foreign Institutional Investors (FIIs) bought equities worth Rs 73.12 crore on Tuesday, according to exchange data. Global oil benchmark Brent crude climbed 1.09 per cent to $82.81 a barrel. India’s industrial production growth slowed to 3.8 per cent in January, while the February retail inflation at 5.09 per cent remained within the Reserve Bank’s comfort zone for the sixth straight month, according to the latest government data. The BSE benchmark ended 165.32 points or 0.22 per cent higher at 73,667.96 on Tuesday. The Nifty ended flat at 22,335.70, up 3.05 points or 0.01 per cent.