Tracking global cues, Dalal Street facing a huge sell-off on Wednesday’s trade. a broad-based selloff is recorded with banking, financial, pharma, auto and IT stocks underperforming the most.
After gap down start, Sensex has extended losses, trading over 650 points or 1.24% at 51,924. While the Nifty 50 index gave up the 15,600 support level and hit a 5-week low.
At around 11:14 AM, Sensex is trading at 52,040.29 down by 538 points or 1.02%. Nifty 50 was performing at 15,568.65 lower by 177 points or 1.13%.
Here are the key factors that dragged the market lower:
Weak Asian markets & US Markets:
Asian share markets are trading near seven-month lows. The Japanese ‘Nikkei’ trading lower by 450 points as the huge sell-off in the Chinese stocks see collateral risk-off in other Asian markets. The Hong Kong 'Hang Seng’ has fallen over 2500 points in 3 days which highlights the losses in one market and which could see foreign investors dump stocks in other markets.
US stocks corrected with global cues as Nasdaq fell over 2% before recovering to close down 180 points. Bond yields dip to 1.25% as the risk of trade sees flight to safety while US$ closes flat at 92.45. Alphabet numbers after market see stocks up 3% as results beat all estimates.
All Sectoral indices in red:
Huge selling pressure was witnessed among all sectors with the banking sector and finance sector witnessing most of the selling. The Bank Nifty slipped over 500 points with all stocks in red except
IndusInd Bank which was up marginally.
AU Bank,
Axis Bank, RBL Bank, HDFC Bank and Kotak Bank were down in the range of 4-2% respectively.
Also, the Nifty Financial index was down by 246 points at 16,282.20. M&M Fin, Chola Fin, Muthoot Finance and HDFC AMC dipped over 2% each.
Yet, another selling day was seen in the pharma index after opening higher in the early trade.
Dr Reddy's slips over 3% after Q1 numbers. Net profits for the Jun-21 quarter stood at Rs380cr with the profit fall coming due to the impairment provisions of Rs184cr in the quarter. The net profit margins for the Jun-21 quarter stood at 7.69%, higher than 13.43% NPM in the Jun-20 quarter.
Aurobindo Pharma, Cadila, Cipla and Sun Pharma also fell 2% each on the Nifty Pharma index.
Q1FY22 results in focus:
Maruti Suzuki, Nestle India, Birlasoft, Central Bank of India, and Route Mobile as these companies will release their quarterly numbers later today.
Spike in India VIX:
India VIX, volatility index, surged 17% to 15.53 levels as the Sensex, Nifty 50 fell.
IMF trims India’s GDP Forecast:
Citing the impact from the Covid second wave, the International Monetary Fund (IMF) slashed India's growth projection from 12.5% to 9.5% for fiscal 2021-22. The projection aligns with RBI's growth forecast for the current financial year.
Ahead of F&O expiry & US Fed meet:
With the US Fed, meet and F&O expiry will be in focus as huge volatility can be seen the stock market
FII flow trends:
Foreign institutional investors were net sellers in the capital market on July 27 as they offloaded shares worth Rs1,459.08cr, as per exchange data.