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The market ended on a negative note for the fourth straight day on Wednesday, witnessing across-the-board selling amid rising Covid cases and weak global cues.
According to analysts, there was a sharp drop at 3 pm due to heavy selling by foreign portfolio investors.
The BSE Sensex closed at 49,801.62, down 562.34 points or 1.12 per cent. It hit an intraday high of 50,561.12 and an intraday low of 49,718.65. The Nifty50 closed at 14,721.30, down 189.15 or 1.27 per cent.
Binod Modi, Head Strategy at Reliance Securities, said, “Domestic equities dropped for the fourth consecutive day as concerns about the recent rise in Covid-19 cases in various parts of the country and high inflation continued to weigh on investors’ sentiments. Additionally, weak cues from global markets ahead of the FOMC meeting outcome also caused selling in domestic equities. All key sectoral indices witnessed selling pressure today, with PSU Banks, Metals and Auto indices witnessing steep correction. “
Only four stocks - ITC, Infosys, TCS and HDFC - of the BSE Sensex 30 stocks closed in the green. Hindustan Unilever, Mahindra & Mahindra, Tech Mahindra, ICICI Bank and Maruti were among the top laggards.
On the Nifty50, only two out of fifty scrips closed in the green.
After opening flat at 50,436.02, the BSE Sensex almost immediately dipped into negative territory. Nifty50, which too opened positive at 14,946.55 against the previous close of 14,910.45, witnessed selling pressure.
Foreign investors remain cautious
Foreign investors remained cautious as they are awaiting clear signals from the US Fed. The Federal Open Market Committee meeting is set to conclude today.
Vinod Nair, Head of Research at Geojit Financial Services, said, “Indian market remained in negative territory as investors traded cautiously ahead of the US Fed meeting coupled with a resurgence in covid cases. Adding to that, the rise in international crude prices is also dragging the Indian market. Global markets also displayed a weak opening as it awaits the final decision of the FOMC meeting today, which will decide the market trend in the short-term. On a consensus basis, an accommodative policy is expected by FED, which will help the global market to stabilise.”
Metal, PSU Bank stocks drag
Metal and PSU Bank stocks dragged the index further down. Nifty Metal was down by 2.46 per cent at closing, while Nifty PSU Bank was down 3.77 per cent.
IT stocks that had managed to maintain the gains during the first half also lost momentum in the second half and closed in the red. Nifty IT was down by 0.68 per cent at closing.
S Ranganathan, Head of Research at LKP Securities, said, “Ahead of the FOMC meeting, the Bank Nifty fell for the third consecutive day to drag Indices down almost 1.5 per cent today. Metals and PSU stocks succumbed to profit-taking today. The broader market did witness value-buying by savvy investors expecting an acceleration in the pace of vaccination.”
Among the broader indices, Nifty MidCap 50 was down 2.81 per cent at closing while Nifty SmallCap 50 was down 2.38 per cent. The S&P BSE Midcap and the S&P BSE SmallCap indices were down by 2.28 per cent and 2.12 per cent, respectively.
“Notably, selling pressure in midcap and small-cap stocks was high as recent outperformance in this space made investors take some profits off the table,” said Modi
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