Mumbai
Reversing their two-session rising streak, equity benchmarks buckled under selling pressure on Wednesday as the Russia-Ukraine war hammered investor confidence and roiled financial markets globally.
A sharp depreciation in the rupee, unabated selling by foreign investors and lacklustre macroeconomic data added to the gloom, analysts said.
The 30-share BSE Sensex opened weak and plunged about 1,200 points in intra-day trade, before recovering some lost ground. It finally ended 778.38 points or 1.38 per cent lower at 55,468.90.
On similar lines, the broader NSE Nifty shed 187.95 points or 1.12 per cent to close at 16,605.95.
Maruti Suzuki was the top loser in the Sensex pack, tumbling 6 per cent, after the country’s largest carmaker reported subdued sales and production figures for February, hit by the ongoing global semiconductor shortage. Other auto stocks too bore the brunt of heavy selling.
Dr Reddy’s, Asian Paints, ICICI Bank, HDFC twins and UltraTech Cement were among the other prominent laggards, slipping as much as 5.14 per cent.
On the other hand, Tata Steel, Titan, Reliance Industries, Nestle India and Axis Bank climbed up to 5.54 per cent.
Market heavyweight Reliance Industries spurted 1.67 per cent after crude oil prices touched the USD 110 per barrel mark.
The market breadth was negative, with 23 of the 30 Sensex constituents closing in the red.
“The strengthening of war drowned the global market, alarming the Indian market to start with substantial weakness. The negative effect was more on large-caps in-line with weak Q3 GDP data and downgrade of FY22 growth to 8.9 per cent from 9.2 per cent by NSO. Mid and smallcaps outperformed, in the context of the recent carnage in the broader market, making them a better pick.
“It makes sense to deploy the surplus cash in your portfolio in a step-by-step manner assuming stability in the future on a medium to long-term basis…However, volatility is expected in the near term given boiling crude price, state election outcome, and Fed policy status in the coming weeks,” said Vinod Nair, Head of Research at Geojit Financial Services.
S Hariharan, Head of Sales, Emkay Global Financial Services, said the market is currently caught between many macro cross-winds — higher inflationary pressure exerted by a sharp rise in commodity prices across the board, policy tightening by central banks and slowing growth impulses.
“FII flow environment has turned decisively negative in CY22, with net sell flow of USD 9 billion so far, and while DIIs have been absorbing sell flow with a similar quantum of deployment, historically it has been seen that weak price action is followed by outflows from DIIs as well,” he noted.
Sector-wise, BSE auto, bankex, finance, consumer discretionary goods and telecom slumped up to 2.87 per cent, while metal, power, oil and gas and utilities posted gains.
In the broader markets, the BSE midcap and smallcap gauges dipped up to 0.17 per cent.
Russia’s military offensive against Ukraine entered its seventh day on Wednesday, with fighting intensifying in Ukrainian capital Kyiv and other big cities, even as western nations tightened sanctions on Moscow.
US President Joe Biden announced that the United States is closing its airspace to Russian planes, asserting that this along with other punitive measures would weaken Russia.
The US and EU have imposed various sanctions on Russia. These include curbs on Russia’s biggest banks and excluding its financial institutions from the SWIFT global payments system.
In other Asian markets, bourses in Hong Kong, Tokyo and Shanghai ended with losses, while Seoul closed in the green.
Stock exchanges in Europe were trading mixed in afternoon trade.
Tracking the Ukraine crisis, Brent crude futures surged 5.09 per cent to USD 110.31 per barrel.
The rupee depreciated by 38 paise to close at 75.71 against the US dollar on Wednesday as riskier assets took a hit amid deepening geopolitical tensions.
Continuing their selling spree, foreign institutional investors sold shares worth Rs 3,948.47 crore in the Indian capital market on Monday, exchange data showed.
