All quarters of the market saw selling, led by metal and realty names, wiping off Rs 2.78 lakh crore of equity wealth reflected by the total market cap of BSE-listed companies.
The 30-share pack Sensex declined 555.15 points or 0.93 per cent to close at 59,189.73. The index closed down nearly 800 points from day’s high. Its broader peer NSE Nifty dropped 176.30 points or 0.99 per cent to 17,646.
“Spike in crude prices is spooking the Indian market while inflation is affecting US bond yields. RBI commenced its three-day MPC meeting in which the central bank is expected to keep rates unchanged, however, it is likely to announce measures to gradually pump out liquidity from the economy,” said Vinod Nair, Head of Research at Geojit Financial Services.
Market at a glance:
- Hindustan Copper spikes 4 per cent as Vedanta looks to raise stake
- ONGC extends its gains on rising crude prices, up 2 per cent
- Cheviot Company falls 1 per cent after Vijay Kedia sells stake
- India VIX, a barometer of volatility and fear, tanks 6 per cent
FACTORS DRAGGING MARKET
Rupee dwindles: The volatility in currency markets weighed heavily on equity. One dollar was valued at Rs 75, the highest since April. Equities and dollars have an inverse relationship.
Crude, gas price surge: Gas prices in the UK surged about 40 per cent in a day. Crude oil prices also hit multi-year highs. Prices have been rising due to the supply squeeze and rising demand. This will eventually lead to higher import bills for India.
Global market fall: There was weakness in global markets as well. European markets were trading lower. London-based FTSE was down 1.66 per cent while Paris and Frankfurt declined 2.04 per cent and 2.16 per cent, respectively. In Asia, Indonesia, barring Singapore and Indonesia, all ended in the red. Dow Jones futures were also trading in the red.
Power woes for India: Reports that Indian power plants have just 4 days of coal left with them sent shockwaves through the Dalal Street. This is lower than even for China. India relies on coal for 75 per cent of its electricity and if it is not replenished, it will result in disruption of businesses.
Among the bluechip names, Tata Consumer was the top gainer, rising 2.48 per cent. ONGC, UPL, Britannia Industries, HDFC Bank, Bharat Petroleum, HDFC and Bajaj Finance were other gainers.
Hindalco Industries was the top loser in the Nifty pack for another day, falling 4.10 per cent. SBI Life Insurance, IndusInd Bank, Tata Steel, JSW Steel and Coal India were others that ended in the red.
Broader market indices ended lower, in line with their headline peers. Nifty Smallcap fell 0.83 per cent and Nifty Midcap dropped 0.83 per cent. Nifty 500, the broadest index on NSE, ended down 0.95 per cent.
Infibeam Avenues, Dilip Buildcon, Radico Khaitan, Deepak Nitrite, IRCTC and Tata Elxsi were top gainers from mid and smallcap indices, climbing in the range of 5-8 per cent.
Aditya Birla Fashion Retail, National Aluminium, Astral, IDBI, Laxmi Chemicals and CanFin Homes were major losers from broader market space, falling in the range of 4-7 per cent.
Market breadth was in favour of losers as 1,443 stocks ended in the green, while 1,847 names settled with cuts. As many as 300 securities hit 52-week highs, mostly from the smallcap space. Meanwhile, 13 names hit 52-week lows, mostly from the microcap space. About 420 stocks hit upper circuit limits and 180 lower circuit limits.