A selloff in financial stocks dragged the markets lower in late afternoon deals
Domestic share markets snapped a four-day winning run on Wednesday, as a selloff in financial stocks in late afternoon deals dragged the benchmark indices more than 1 per cent deep in the negative territory. The S&P BSE Sensex slumped to as low as 34,794.93 during the volatile session, shedding as many as 911.62 points from the 35,706.55 mark touched at the day's strongest level. The broader NSE Nifty 50 benchmark index dropped to an intraday low of 10,281.95 in the final hour of trade, having soared to as high as 10,553.15 earlier.
The Sensex ended at 34,868.98, down 561.45 points - or 1.58 per cent - from its previous close, whereas the Nifty shed 165.70 points (1.58 per cent) to settle at 10,305.30. Both benchmark indices had risen nearly 6 per cent in the past four sessions.
ICICI Bank, IndusInd Bank, Power Grid, Hindalco, Zee Entertainment and State Bank of India (SBI) - closing between 4.13 per cent and 7.12 per cent lower - were the worst hit among the 39 stocks that declined in the 50-scrip Nifty basket. On the other hand, Asian Paints, ITC, Eicher Motors and Hero MotoCorp - ending between 2.94 per cent and 3.81 per cent higher - were the top percentage gainers.
ICICI Bank, HDFC Bank and Kotak Mahindra Bank alone contributed more than 250 points to the fall in Sensex.
Market breadth favoured losses as 1,262 stocks on the BSE ended higher against 1,466 that moved in the opposite direction. On the NSE, 754 stocks advanced while 1,074 declined.
Analysts say selling pressure was witnessed as investors rushed to settle their positions in the monthly derivatives contracts.
"Derivatives settlement pressure is there... The markets have rallied in the past three sessions where penny stocks have gone up and not quality stocks... A liquidity-driven rally like this runs out with the slightest occurrence of fear," AK Prabhakar, head of research at IDBI Capital Markets, told NDTV.
The futures and options contracts for the month of June are due for expiration at the end of Thursday's session.
"Once the rally is behind, the correction may continue to cut 9,500 (Nifty) in July," he added.
Equities in other Asian markets crept to a four-month high as investors remained upbeat on the outlook for a re-opening of the global economy even as cases of the coronavirus looked to be accelerating to new peaks. MSCI's broadest index of Asia Pacific shares outside Japan rose 0.17 per cent, but Japan's Nikkei 225 benchmark declined 0.07 per cent.
While China's Shanghai Composite and South Korea's KOSPI barometers climbed up 0.30 per cent and 1.42 per cent respectively, Hong Kong's Hang Seng index fell 0.50 per cent.
The E-Mini S&P 500 futures gave up early gains to trade 0.86 per cent lower, indicating a negative start for US shares on Wednesday.
European shares started Wednesday's session on a negative note, with the United Kingdom's FTSE benchmark index last seen trading down 2.23 per cent in early trade. France's CAC and Germany's DAX indices were down 1.93 per cent and 2.22 per cent respectively at the time.
