Sensex, Nifty give up early gains; Airtel, RCom, J&K Bank plunge up to 6%

Indian benchmark indices gave up their initial gains on Wednesday, slipping into negative territory amid the looming concerns for the global economy. However, other major global markets traded firms. Relentless selling from the global investors and jittered sentiments over aggressive rate hikes kept the investors on the tenterhooks.

At 9.20 am, the 30-share pack BSE Sensex dropped 118 points or 0.21 per cent to slip below 60,000-mark, while NSE's Nifty50 index shed 37 points or 0.21 per cent to 17,877.2.

Broader markets fared better than the headline peers as the BSE midcap index was flat, whereas smallcap index was trading one-third per cent higher. Fear guage India VIX jumped about 3 per cent to 15.89-level.

The biggest drag on the market in the near-term is the sustained selling by FIIs for thirteen continuous sessions, which has taken the cumulative cash market selling to Rs 16587 crores. Higher valuations in India and attractive valuations in markets like China are nudging the FIIs to sell in India and move money to cheaper markets, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Even though this is a short-term challenge, this can also turn out to be an opportunity for long-term investors. Last year, too, FIIs sold heavily in early months and DIIs/ retail, who absorbed all FII selling, made big profits when the market recovered," he said.

On a sectoral front, only Nifty metal and IT indices held firm, whereas telecom, banking, financial services and FMCG counters led the losers, falling up to a per cent each.

Among the Nifty50 counters, Bharti Airtel plunged more than 3 per cent, whereas Adani Entertainment, Cipla, HDFC, Divis Labs and Eicher Motors shed a per cent each.

On the contrary Hindalco, JSW Steel and Tata Motors gained 2 per cent each, whereas Tata Steel, Infosys and Ultratech Cement were up a per cent each.

Auto stocks were at the focus of investors as the Auto Expo kicks off in Greater Noida on Wednesday. Tata Motors's subsidiary completed acquisition of Ford India's manufacturing plant situated at Sanand, Gujarat.

In the broader markets, Reliance Communications tanked another 5 per cent, whereas Sigachi Industries tanked 4 per cent over profit booking. J&K Bank, Vijaya Diagnostics and Adani Transmission retreated 3-4 per cent each.

Among the gainers, Speciality Restaurants and Ugar Sugar jumped 5 per cent each. KBC Global, Edelweiss Financial Services, Uttam Sugar and Dwarikesh Sugar were trading up to 5 per cent higher.

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