Benchmark indices ended lower amid volatility on Tuesday, dragged by financials, pharma, and oil and gas stocks.

Market, which opened on a negative note amid strong Asian markets, tried to make a recovery in the afternoon session. Late-hour selling in multiple counters and sustained weakness in Reliance dragged the market.

The BSE Sensex closed at 60,322.37, down 396.34 points or 0.65 per cent. It hit an intraday high of 60,802.79 and a low of 60,199.56. The Nifty50 closed at 17,999.20, down 110.25 points or 0.61 per cent. It hit an intraday high of 18,132.65 and a low of 17,958.80.

Decliners outnumber advancers

The market breadth continued to favour the decliners with 1,729 stocks declining on the BSE against the 1,602 that advanced, while 143 remained unchanged. Furthermore, 362 stocks hit the upper circuit as compared to the 240 stocks that were locked in the lower circuit. Besides, 190 stocks touched a 52-week high and 40 touched a 52-week low.

Vinod Nair, Head of Research at Geojit Financial Services, said the domestic market started trading between gains and losses before slipping into deep red with heavy selling in banking and pharma stocks.

The RBI’s statement that equity market valuations are stretched added to the pressure, he said. “European and the US markets are trading almost flat, ahead of the release of Eurozone Q3 GDP and US retail sales data,” Nair said.

S Ranganathan, Head of Research at LKP Securities, said, “As investors try to figure out the valuation disconnect between the recently listed digital entities versus their traditional counterparts who built distribution reach offline, the euphoria around the former seems to have set minds thinking. As the street worries over inflationary pressures leading to companies raising prices, and their consequent impact on demand, we saw a highly volatile trading session today.”

Auto in focus

On the sectoral front, all indices, except Nifty Auto and Nifty IT, closed in the red. Financials, oil and gas, and pharma stocks witnessed increased pressure.

Nifty Auto was up 2.48 per cent at closing while Nifty IT was up 0.49 per cent.

Binod Modi, Head Strategy at Reliance Securities, said, “Auto stocks witnessed strong buying today due to expectations of a strong sales volume after a possible ease in the supply of semi-conductors in the coming months.”

“The auto sector, though, bucked the trend with auto OEMs seeing good buying interest on reports of an easing in chip and semiconductor shortages,” said Ranganathan.

Meanwhile, Nifty Bank and Nifty Financial Services were down 1.02 per cent and 0.79 per cent, respectively. Nifty Private Bank was down 0.97 per cent while Nifty PSU Bank was down 2.14 per cent. Nifty Oil and Gas was down 1.36 per cent. Nifty Pharma was down 1.26 per cent while Nifty Healthcare was down 1.10 per cent.

Broader indices

As for broader indices, mid-caps also witnessed selling pressure, closing in the red, while small-caps managed to retain gains.

Nifty Midcap 50 was down 0.27 per cent while Nifty Smallcap 50 was up 0.58 per cent. The S&P BSE Midcap was down 0.22 per cent while the S&P BSE Smallcap was up 0.18 per cent.

The volatility index softened 1.74 per cent to 15.20.

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