It was a blood bath on Dalal Street on Monday with benchmark indices closing in deep red amid a broad-based sell-off as bears kept their grip on the market, the fifth consecutive session of losses. 

The market opened on a weak note, tracking weak global cues. Indices slumped further during the day, witnessing across-the-board selling. The broader market faced increased pressure with heavy selling in midcaps and smallcaps. 

The BSE Sensex closed at 57,491.51, down 1545.67 points or 2.62 per cent. It slipped below the 57,000 mark during the day, recording an intraday low of 56,984.01. It recorded an intraday high of 59,023.97. The Nifty 50 closed at 17,149.10, down 468.05 points or 2.66 per cent. The Nifty 50 slipped below the 17,000 mark to record an intraday low of 16,997.85. It recorded an intraday high of 17,599.40.

Sea of red 

The majority of the stocks traded on the exchanges closed in the red. Only two stocks- Cipla and ONGC closed in the green on the Nifty 50. JSWL Steel, Bajaj Finance, Tata Steel, Grasim and Hindalco were the top losers n the Nifty 50 losing around 5-7 per cent. 

As many as 3,071 stocks declined on the BSE as compared to 512 stocks advanced while 123 remained unchanged. Furthermore, 920 stocks hit the lower circuit as compared to the 259 stocks that were locked in the upper circuit. Besides, 252 stocks touched a 52-week high level and 68 touched a 52-week low.

The volatility index jumped 20.84 per cent to 22.83, signalling caution among investors.

The broader market witnessed heavy selling pressure with Nifty Midcap 50 and Nifty Smallcap 50 closing 3.94 per cent and 4.81 per cent lower, respectively. The S&P BSE Midcap was down 3.82 per cent at closing while the S&P BSE Smallcap closed 4.43 per cent lower. 

The heightened tensions in the Russia-Ukraine border continued selling by FIIs and concerns regarding rate hikes by the US Fed that is set to meet this week have spooked investors. Amid concerns regarding monetary tightening, investors will be focusing on the US Federal Reserve’s meeting on Tuesday and Wednesday. Investors across the globe expect a clear signal from the central bank on its plan on interest rate hikes. Further, the market is likely to remain volatile ahead of the Budget presentation.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers said, “Indian markets opened negative following mixed Asian market peers as investors look ahead to US Fed meeting and rising geopolitical uncertainty.”

“During the afternoon session, the further sold off as indices fell well below psychologically crucial levels. The broader indices too capitulated to selling pressure and were trading with heavy losses. Sentiments were so fragile that traders paid no heed toward RBI’s data showing that the country’s foreign exchange reserves grew by $2.229 billion to $634.965 billion in the week ended January 14,” said Solanki.

Parth Nyati, Founder, Tradingo said, “We are seeing a meaningful correction in the market and the intensity of selling is very high on the back of heavy FIIs’ selling. There is risk-off sentiment across the globe amid fear of tightening by the US fed.”

“We are underperforming today and the main reason is global weakness while another reason is some margin calls got triggered especially in new edge companies and that is causing a ripple effect. Anecdotally, Monday remains ugly in a weak market because lots of unwinding is seen by those who carry over the weekend in hope of recovery. The market is overreacting to US Fed tightening and we may see some short-covering after the Fed meeting outcome scheduled on this Wednesday,” Nyati said. 

Ruchit Jain, Lead Research, 5paisa.com said, “Nifty has corrected sharply on the back of short formations in the index. FII’s have been selling in cash segment as well as in the index futures segment since last few sessions which has resulted in selling pressure.”

“The index has tested the 17,000 mark while India VIX has risen sharply to over 23. This indicates that markets are likely to be volatile in the near term and hence, traders should trade cautiously and avoid aggressive positions,” said Jain.

All sectoral indices in red

As the sell-off continued, on the sectoral front, all indices closed in the red with metals and realty recording the highest losses followed by IT and Consumer Durables. 

Nifty Realty slipped nearly 6 per cent at closing while Nifty Metal was down over 5 per cent, Nifty Consumer Durables was down nearly 4 per cent while Nifty IT closed over 3 per cent lower. 

Nifty Auto was down nearly 3 per cent while Nifty Oil & Gas was down 2.5 per cent. Nifty PSU Bank and Nifty Financial Services were down over 2 per cent each. Nifty Bank, Nifty Pharma and Nifty Healthcare Index were down nearly 2 per cent each. 

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