Equity markets witnessed a strong selling pressure on Wednesday, as traders preferred to keep their positions light ahead of T+1 settlement and ensuing Budget.
The 30-share BSE plunged 773.69 points or 1.27 per cent to 60,205.06, while the broader Nifty of the National Stock Exchange declined 226.35 points or 1.25 per cent to close below the 18,000-level at 17,891.95.
“The month of January has seen very tepid market volumes – daily cash market volumes of ₹47,000 crore, compared to ₹56,000 crore in October-December quarter. This is despite strong institutional participation, which is up to an average of 27 per cent of daily market volumes compared with 22 per cent in October-December quarter,” said S Hariharan, Head Institutional Equity Sales, Emkay Global Financial Services.
“January rollover spreads for futures positions have been cheaper than the last three months, reflecting relative reluctance from long positions to roll positions,” he added.
Exchanges are set to rollout T+1 (settlement within one day after the transactions) from Friday.
Among Sensex stocks, Hindustan Unilever, Maruti Suzuki, Tata Steel, NTPC and Sun Pharma were the major gainers. On other hand, SBI, IndusInd Bank, HDFC Bank, Axis Bank, HDFC, Tech Mahindra, ICICI Bank, UltraTech Cement, L&T, Bajaj Finserv, Reliance, HCL Tech, Asian Paints, Wipro and M&M were the major losers.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said: The short-term trend of Nifty has turned negative. Having placed at the important support, minor pullback rally is expected in the short term. “But the overall chart pattern indicates the higher possibility of decisive downside breakout at 17,750 levels in the near term. Such anticipated market action is likely to bring steep weakness for the market ahead,” he added.
Most sectoral stocks too witnessed a sharp decline. Among them the worst affected were BSE Power (2.72 per cent), Utilities (2.87 per cent), Bankex (2.42 per cent), Financial Services (2.11 per cent), Telecommunications (2.06 per cent), Oil & Gas (1.76 per cent), Realty (1.92 per cent) and Capital Goods (1.06 per cent).
Experts said investors’ focus is on Q3 results announced by companies.
“The earnings season is in full swing and markets are closely following the management commentary. So far, the Q3-FY23 results suggest increased revenue growth with some pressure on the margin front,” said Mitul Shah - Head of Research at Reliance Securities.