Sensex slumps 570 points, Nifty settles below 19,750; SJVN cracks 13%, PSU banks bleed

Bears continued their attack on Dalal Street as the Indian equity markets settled sharply lower for a third straight trading session. Weak global cues weighed on the market sentiments. The US Federal Reserve signaled to keep interest rates higher for longer-than-expected, which dragged the markets lower.

The selling pressure in the benchmark indices intensified as the session progressed and there were no signs of recovery during the weekly expiry of the derivative contracts. The selling pressure was seen across the segments and sectors but was majorly driven by heavyweight counters.

For the day, BSE's barometer Sensex crashed 570.60 points, or 0.85 per cent, to settle at 66,230.24. NSE's Nifty50 plunged 159.05 points, or 19,742.35 per cent, to end at 19,742.35. Broader markets underperformed the headline peers as BSE midcap and smallcap indices dropped up to a per cent each. Fear gauge India VIX dropped about 3 per cent to 10.82-level.

Bearish sentiment across the global equities led to selling in the domestic market for the third straight session as investors fretted over the US Fed statement indicating one more rate hike later this year. Negative catalysts like overseas fund outflows, rising dollar index and treasury yields and crude oil prices are making investors jittery, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

"The Nifty has completed one leg of correction, and for the bulls now, 19,700 would be the key level to watch out for. If the index succeeds to trade above the same, then we could expect one relief rally, and above 19,700 the market could rally till 19,825-19,875. Fresh selling is possible only after the dismissal of 19,700 and below the same, the index could slip till 19,650-19,600," he said.

On a sectoral front, only the Nifty media index managed to settle in green. The Nifty PSU Bank index dropped more than 2 per cent each, while the Nifty auto and private bank indices also settled 2 per cent lower. The Nifty financial services, pharma and realty indices declined more than a per cent each.

Bears continued to dominate the markets. Except for the media, all other sectors ended the day in red. PSU Bank was the top loser followed by auto and Nifty Bank. The midcap index moved in tandem with the frontline index and Smallcap underperformed, said Aditya Gaggar, Director at Progressive Shares.

In the Nifty50 pack, Mahindra & Mahindra and ICICI Bank led the losers and dropped 3 per cent each. Cipla, State Bank of India, IndusInd Bank and UltraTech Cement dropped more than 2 per cent each. Hero MotoCorp, Kotak Mahindra Bank, Bajaj Auto and Grasim Industries were the other key losers for the day.

Among the gainers, Adani Ports & SEZ surged about 2 per cent for the day. Tech Mahindra, Dr Reddy's Laboratories, Asian Paints and Bharti Airtel gained more than a per cent each. Bharat Petroleum, Infosys, Britannia Industries, Hindustan Unilever and UPL were other key gainers for the day.

Domestic market declined following a hawkish stance by the Fed chair and prolonged high interest rate trajectory which is not positive for a slowing global economy. PSU banks, mid-cap and smallcaps were the worst hit due to stretched valuations and concern over moderation in yields. Rising oil prices and erratic rainfall further led investors to stay cautious in the market, said Vinod Nair, Head of Research at Geojit Financial Services.

A total of 3,793 shares were traded on BSE on Thursday, of which 2,333 settled with cuts. 1,318 stocks ended the session with gains while 142 shares remained unchanged. A total of 291 shares hit their upper circuit, whereas the 219 shares tested the lower circuit levels for the day.

In the broader markets, SJVN plunged more than 13 per cent, while Greenlam Industries and Bannari Amman Sugars dropped 7 per cent each. DB Realty, NHPC, Indian Metals & Ferro Alloys and Punjab & Sind Bank declined 6 per cent each. Chennai Petrochem, UCO Bank and RSWM ended 5 per cent down each.

On the other hand, Prime Focus gained about 15 per cent for the day, while KSB gained over 14 per cent. EKI Green Energy rallied more than 10 per cent, while Dishman Carbogen and Nava rose 9 per cent each. Hathway Cable & Datacom ended 8 per cent higher at the end of session.

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