NEW DELHI: Stock heavyweights dragged key benchmark indices down on Wednesday even as the
latched on to Prime Minister Narendra Modi’s address to the nation.
The Sensex spurted over 200 points during Modi’s speech that India has shot down a live satellite in space.
The market reversed its course and ended lower, erasing early gains.
Global shares were off-colour, hoping that central bank action in the world’s biggest economies could temper some of the slowdown in world growth, even though bond yields continued to flag recessionary fears, Reuters reported.
Volatility remained high ahead of the expiry of March futures and options series.
The BSE Sensex came off some 350 points from its intra-day high. The 30-share index closed at 38,133, down 101 points, or 0.26 per cent. Reliance Industries alone was responsible for half of the losses.
The broader Nifty ended at 11,445, down 38 points or 0.33 per cent. However, the Nifty Bank index hit fresh record highs and settled above the 30,000 mark for the first time ever.
As many as 20 Sensex compnents declined while 10 advanced. NTPC with a loss of 2.25 per cent sank most, followed by Tata Motors, Bharti Airtel, Power Grid, HDFC and RIL.
On the other hand, YES Bank looked up, up 5.62 per cent. IndusInd Bank, SBI, Bajaj Auto and Vedanta registered solid gains.
Bucking the trend, midcap and smallcap indices jumped 0.59 per cent and 0.64 per cent, respectively.
In the sectoral space, energy, power and utilities faltered, declining around 1 per cent each. However, bankex was the top sectoral performer.
In stock-specific action, ICICI Prudential Life surged over 9 per cent after its offer for sale (OFS) issue by promoters received a strong response from non-retail investors. The OFS was oversubscribed 3.96 times on March 26, the first day of subscription that opened only for non-retail investors. The retail quota was subscribed 37 per cent on Day 2 so far.
A round-up on factors
Volatility stoked worries on Dalal Street as investors squared off positions ahead of March derivatives expiry on Thursday. India VIX spiked 3.57 per cent.
Global markets flat
European shares, which broke four straight days of losses on Tuesday, held steady though bank shares rose 1 per cent after comments by European Central Bank governor Mario Draghi signalled more assistance for banks via a cheap loans programme. However, MSCI’s all-country world equity index, which tracks shares in 47 countries, was down around 0.1 per cent.
Selling in index heavyweights
Index heavyweights — RIL, HDFC duo and TCS — caused much of the damage. Losses in the blue chips offset any gains by bank stocks. RIL along with HDFC and HDFC Bank wiped off over 100 points from the Sensex.
Banking space has outperformed with a significant margin while auto and metals have underperformed in the recent past. We continue to maintain a positive bias for the broader markets with bouts of correction to be used for accumulation. For the near term, support on the downside is seen at 11,200 levels while targets are seen at 11,800-12,200.
– Sahaj Agrawal, Kotak Securities
Market gave up opening gains ahead of F&O expiry and on worries over global economic growth as US 10-year yield slid further. However, the bank index remains in positive trajectory in expectation of ease in liquidity crunch and pick-up in credit growth by FY20. India is likely to continue its outperformance among emerging markets due to FIIs inflow, expectation of revival in earnings growth and political stability.
– Vinod Nair, Head of Research, Geojit Financial Services