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Buying by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) fail to lift the market, with majority of stocks ending in the red as fear of Covid threat re-emerges. Notwithstanding the gains made during the afternoon session, the equity benchmarks lost the steam and closed in the red. The sell-off, despite strong global markets, caught market participants off-guard, said analysts.
After opening in a positive territory, the BSE Sensex slumped to a low of 60,637.24 and closed at 60,826.22, down 0.39 per cent, over the previous day’s close of 61,067.24. Similarly, Nifty50 closed closed 0.39 per cent lower at 18,127.35.
Equity markets in Seoul, Tokyo, Hong Kong, Australia and Taiwan ended in the green while most stocks across the Europe were trading in the positive territory in mid-session deals. The US markets had ended higher on Wednesday.
According to provisional data from exchanges, FPIs bought shares worth ₹928 crore and DIIs ₹2,206 crore on net basis.
Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services Ltd, said: “Markets are likely to remain volatile given uncertain environment and rising Covid cases globally. On the domestic front, government has started taking precautionary measures to control the spread of the virus. This has led to cautiousness among investors.”
Except BSE Teck, all the indices on the BSE (be it market-cap based or sectoral/thematic based) closed in the red. BSE Industrials, Utiilities, Capital Goods, BSE Power, Auto, Metal, and realty have tumbled between 1 per cent and 1.7 per cent.
As many as 2,858 shares declined on the BSE, while 705 stocks gained.
Among the Nifty 50 stocks, only nine stocks closed in the green, led by Sun Pharma, SBI Life, UltraTech Cement, Grasim and Asian Paints.
Ruchit Jain, Lead Research ,5paisa.com, said: “In spite of a rally in the global markets rally, domestic markets shrugged off the cues and continued the previous day’s negative momentum. Although the damage in the index was not big, the broader markets witnessed a sell-off and the mid- and small-caps witnessed underperformance.”
BSE MidCap, BSE SmallCap and BSE500 edged down 0.77 per cent, 1.83 per cent and 0.63 per cent, respectively. However, India VIX, volatility index on the NSE, slipped 2.41 per cent to 15.1875.
According to Joseph Thomas, Head of Research, Emkay Wealth Management, stocks across market caps and sectors traded lower with metals, auto and PSU banks suffering the worst fall.
“Since countries like India and those in Europe have a much better level of preparedness, the impact may not be too hard this time around, and activity could remain closer to normal,” he added.
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