A sharp selloff engulfed domestic markets in the second half of the trading session amid fears that a second-wave of Covid-19 infections could derail India's already fragile economic recovery.
India today reported 28,903 fresh cases, the most in a day since December 13 last year and the highest in 2021. Amid this backdrop, PM Narendra Modi called for "quick and decisive" steps to check the "emerging second peak"
PM Modi in a virtual meet with the state chief ministers stressed that if we do not stop it here, then a condition for a nationwide outbreak may emerge.
Besides, investors also chose to stay on the sidelines ahead of the Federal Reserve policy outcome later tonight. According to Vinod Nair of Geojit Financial Services, a final decision of the FOMC meeting will decide the trend of the market in the short-term. On a consensus basis, an accommodative policy is expected by the Fed, which will help the global market to stabilize.
After gyrating between gains and losses in early trade, benchmark indices witnessed heavy selling pressure later in the trade amid weakness in shares of index heavyweight Reliance Industries and banking and financial stocks.
The BSE barometer Sensex ended closer to day's low as it slipped 1.12% or 562 points to 49,802 while its NSE counterpart Nifty shed 1.27% or 189 points to 14,721.
In the 30-pack index, barring four stocks - namely ITC, Infosys, TCS and HDFC, all ended in the red with ONGC as the worst performer down 5%, followed by NTPC, Sun Pharma and State Bank of India that shed 3% each. Reliance Industries, with a 2% fall, was the biggest Sensex drag. It was trailed by HDFC Bank, Kotak Bank, SBI and ICICI Bank.
The fall in the broader market was more pronounced as BSE Midcap and Smallcap lost 2.48% and 2.21% each. Adani Power, Vishwaraj Sugar, Bayer Cropscience and Kellton Tech Solutions were among the top performers from the mid and smallcap space, rising up to 14% while IDBI Bank, BHEL, Tata Power, Vaibhav Global and MTNL were among the top losers, down between 6-11 per cent.
Sectorally, all indices on the NSE ended in the red with PSU Bank leading the losers with a fall of 3.77 per cent. Nifty FMCG and Nifty IT indices were the least hit, down 0.47% and 0.68%.
On the stock-specific front, shares of SBI Card declined 4.4% after to Rs 976.75 on the BSE after over 40 million equity shares changed hands via a block deal.
On the flip side, shares of Dalmia Bharat added 3.75% to end at Rs 242.35 per share on the BSE after the promoter increased its stake in the firm via the open market. The stock had hit a 52-week high in intraday trade, a level last seen in September 2018.
Shares of GMM Pfaudler after rallying 8% in intraday session ended only 2% higher as they acquired assets of HDO Technologies worth Rs 58 crore.
In other news, according to data released by the Telecom Regulatory Authority of India (Trai) on Wednesday, the top two telcos Reliance Jio and Bharti Airtel have added 2 million and 5.9 million wireless subscribers respectively in the month of January. With this, Airtel outpaced Jio for the sixth straight month on user additions. Surprisingly, Vodafone Idea (Vi) has added users for the first time since the merger back in 2018, gaining 1.7 million wireless subscribers.
Now, an update on the primary market
The much-awaited initial public offer by Rakesh Jhunjhunwala backed Nazara Technologies sailed through on Day 1 of the bidding process and was subscribed 3.5 times as of 4.30 pm. Suryoday SFB IPO which also opened today saw a lukewarm response and received only 32% subscription.
Meanwhile, Kalyan Jewellers' IPO sailed through and was subscribed 1 time; the issue closes tomorrow.
The IPOs of Laxmi Organics and Craftsman Automation, meanwhile, were subscribed 106.7 times and nearly 4 times respectively as of the same time. The issues close today.
A look at the global markets
Asian and European indices dropped as investors waited to see if the US Federal Reserve will signal a faster path toward policy normalisation than previously expected. The US central bank ends a two-day meeting later in the day.
An index of regional equities excluding Japan pulled back 0.5 per cent, led by declines in South Korea’s Kospi. The Shanghai Composite index lost 0.3 per cent and Hong Kong’s Hang Seng fell 0.3 per cent. In Europe, the pan-European STOXX 600 index edged 0.02 per cent lower.
S&P500 and Nasdaq futures also traded in the red, indicating a weak start to the session later in the evening.
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