Sensex tanks over 350 points, Nifty slips below 19,650; Redington, Cholamandalam Financial down up to 6%

Indian equity benchmarks opened lower on Wednesday, taking cues from the global markets. The 30-share BSE Sensex slumped 380 points or 0.57 per cent to trade at 66,079, while the broader NSE Nifty was down 112 points or 0.57 per cent to trade at 19,621. Mid- and small-cap shares were also down as Nifty Midcap 100 fell 0.31 per cent and small-cap shed 0.10 per cent.

Asian markets edged lower today, mirroring overnight losses in Wall Street losses, as data indicated tightness in the labour market despite the US Federal Reserve's rate hikes.

The data provided room for the US central bank to hike rates in September, dampening sentiment as most investors saw the Fed rate hike in its July meeting as the last in the current tightening cycle. Further, ratings agency Fitch downgraded the US long-term debt rating to AA+ from AAA, citing potential fiscal deterioration over the next three years.

Back home, foreign institutional investors (FIIs) sold Rs 92.85 crore of Indian equities on a net basis during the previous session, while domestic investors purchased Rs 1,036 crore of shares, as per provisional NSE data.

14 out of the 15 sector gauges -- compiled by the National Stock Exchange -- were trading in the red. Sub-indexes Nifty Bank, Nifty Financial Services, Nifty Metal, Nifty FMCG and Nifty Consumer Durables were underperforming the NSE platform by falling as much as 0.57 per cent, 0.55 per cent, 1.03 per cent, 0.52 per cent and 0.48 per cent, respectively.

"Rate hike by the US Fed last week and hinting at a further increase has spread uncertainty across the global markets, which has sparked volatility since then. On the domestic front, tepid earning reports and listless action from the FIIs are seen undermining the market mood. Risk averse market atmosphere is also quite likely ahead of Friday’s US jobs report," said Prashanth Tapse, Senior VP (Research) at Mehta Equities.

On the stock-specific front, Tata Steel was the top loser in the Nifty pack as the stock cracked 1.87 per cent to trade at Rs 120.90. Tata Consumer Products, Hero MotoCorp, Cipla and Hindalco fell up to 1.49 per cent.

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In contrast, Adani Ports, Adani Enterprises, ONGC, PowerGrid and Maruti were among the top gainers.

The overall market breadth was positive as 1,623 shares were advancing while 1,235 were declining on BSE.

On the 30-share BSE index, HDFC Bank, Reliance Industries, ICICI Bank, ITC, L&T and Tata Steel were among the top laggards.

Also, Redington, Cholamandalam Financial Holdings and Cholamandalam Investment and Finance Company tanked up to 5.54 per cent. On the other hand, KEC International, Indiabulls Housing Finance, Finolex Industries and Star Cement jumped up to 8.76 per cent.

On Tuesday, Sensex had slipped 68 points or 0.10 per cent to close at 66,459, while Nifty had moved 20 points or 0.10 per cent lower to finish at 19,734.

Nifty outlook

 

"The 19,800 regions, a break of which we were looking for in order to play a flag breakout, remained firm, turning down upside attempts. Fortunately, the slippages thereon were restricted to 19,720, the downside pivot penciled in yesterday, retaining the 20,600 trajectories. However, inability to float above 19,745 early today, might facilitate yet another attack on the 19,720-19, 695 band, a break of which could let the bears dominate and make intraday recovery difficult," said Anand James, Chief Market Strategist at Geojit Financial Services.

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