Bear attack on Dalal Street: Sensex falls about 500 pts, Nifty below 19,350

Domestic equity markets were under severe selling pressure on Thursday amid the weekly expiry of the F&O derivative contracts. Weak global cues and selling in index heavyweight sectors weighted on market sentiments. Signals of more rate hikes by the US Fed also weighed on the markets.
 

BSE Sensex dropped about 500 points to trade at 65,073, while NSE's Nifty50 dropped about 130 points to hover around 19,335.50 during the day. Broader markets outperformed the headline indices as the BSE midcap and small-cap indices added about one-fourth a per cent each. Fear gauge India VIX spiked more than 3 per cent to 12.50-levels.

Barring the Nifty PSU bank and consumer durable indices, all other sectoral indices were trading in red. The Nifty Oil & Gas and FMCG indices topped among the laggards, while IT, pharma, metals and financial also dragged the markets lower during the trading session.

Stock including Reliance, ITC, HDFC Bank, ICICI Bank, Larsen & Toubro and Tata Consultancy Services were among the biggest contributors among the laggards for the day, while Titan, Axis Bank, State Bank of India and Bajaj Finance tried to provide some relief to the traders.

Global cues for markets continue to be weak. There are two negatives weighing on global stock markets now.The US Fed minutes indicate that one more rate hike may be needed in this rate hiking cycle to tame inflation, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Chinese macro data indicate that the economy is slowing more-than-feared earlier, and this will impact global economic growth. In this scenario the Indian market is unlikely to break out to newer highs on a sustained basis and decouple from the rest of the world. However, a sharp correction appears unlikely," he said.

Asian markets declined, dragged by concerns over China's economy in the wake of subdued data over the last few sessions. The MSCI Asia ex-Japan index was down about 0.3 per cent. Even the former US Dollar index, hovering around 103.5, is also weighing on the market sentiments.

Wall Street continued to settle lower as the main US indices fell overnight after minutes of the Federal Reserve's July policy meeting showed members were divided on the need for further rate hikes. Rising global uncertainties have resulted in the risk aversion at Dalal Street.

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