Sensex, Nifty erase early losses; Adani stocks fall up to 6%, Bharat Dynamics rises 4%

It was a tug of war between the bulls and bears on the Dalal Street during the early trade on Tuesday. Benchmark indices see-sawed between positive and negative territory on the back of mixed global cues. Major Asian stocks were down during early trade.

The fallout of Silicon Valley Bank spooked traders' sentiments amid the lingering concerns on other banking stocks. However, the collapse led to speculations that the Federal Reserve could pause its aggressive rate-hiking cycle.

At 9.25 am, the 30-share pack BSE Sensex was trading 95.31 points, or 0.16 per cent, lower at 58,142.54 while NSE's Nifty50 dropped 28.35 points, or 0.17 per cent, to 17,125.95. However, they recovered their initial losses to trade back in green.

On the similar lines, broader markets were back in the positive zone as BSE midcap and smallcap indices recouped its early cuts, and were also trading higher. Fear Gauge India VIX too eased 3 per cent to 15.77-mark.

"The psychological mark of 17,000 is in the vicinity now, followed by 16,900. While on the flip side, the 200 SMA placed around the 17400-17450 odd zone is expected to act as a sturdy hurdle in a comparable period," said  Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One.

"Going ahead, any positive developments in the US market could bring some cheer back and hence one needs to keep a close tab on global bourses. Meanwhile, we advocate to avoid aggressive bets and keep accumulating quality propositions in a staggered manner," he said.

On the sectoral front, Nifty Pharma, Media and FMCG indices were able to hold some gains. The Nifty Metal index plunged over a per cent, whereas Auto and Realty indices were also among top laggards.

Adani Group stocks were again at the focus of markets as the Government issued a statement on the Adani-Hindenburg crisis. Adani Enterprises plunged over 6 per cent, whereas Adani Total Gas, Adani Power, Adani Green Energy, Adani Wilmar, Adani Transmission and NDTV were down 5 per cent. Adani Ports, Ambuja Cements, and ACC were down 2 per cent each.

"Markets have a tendency to overreact- both on the upside and downside. What we are witnessing now is an overreaction on the downside. Concerns of a financial contagion are overdone," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"A positive fallout of the SVB crisis is that the Fed will go slow on rate hikes. The most likely rate action from March 22 meet is a 25 bp hike or, perhaps, no hike. An important factor that investors should keep in mind is that the Indian banking system is strong and least vulnerable to a financial crisis even though sentimental impact is possible," he added

Barring the Adani stocks, M&M topped the losers in Nifty50 pack, falling over 2 per cent. Kotak Mahindra Bank, Tech Mahindra, Bajaj Finance and HCL Tech were down a per cent each. Among the gainers, Larsen & Toubro, Bharti Airtel and Titan jumped more than a per cent each. Tata Steel, HDFC Life Insurance and Cipla were among other gainers.

In the broader markets, Sequent Scientific rose about 7 per cent. Bajaj Holdings, Medplus Health Services and Bharat Dynamics rose up to 4 per cent each. On the contrary, Xelpmoc Design and Tech and Shalimar Paints dropped 7 per cent and 5 per cent, respectively.

Also read: Adani Enterprises, Adani Ports, Adani Power, Adani Green in focus as govt issues statement on Adani-Hindenburg crisis 

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