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Benchmark indices were trading lower during Wednesday afternoon amidst persisting volatility, as sell-off continued.
The market opened on a weak note, tracking global cues. Global equities remained under pressure due to rising US treasury yields. It extended losses, moving in a narrow range ahead of the monthly F&O expiry on Thursday. Benchmark indices were dragged by losses in heavyweight financials such as HDFC and ICICI Bank.The volatility index rose 2.37 per cent to 18.98.
At 1 pm, the BSE Sensex was trading at 59,288.49, down 379.11 points or 0.64 per cent. It hit an intraday high of 59,419.01 and a low of 59,111.41. The Nifty 50 was trading at 17,669.20, down 79.40 points or 0.45 per cent. It hit an intraday high of 17,689.30 and a low of 17,608.15.
Coal India, NTPC, Sun Pharma, Powergrid and IOC were the top gainers on the Nifty 50 while Ultratech Cement, HDFC, ICICI Bank, Asian Paints and Kotak Bank were the top laggards.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “The surge in the benchmark US 10-year yield to 1.546 per cent spooked equity markets in the US with cuts of above 2 per cent in S&P 500 and Nasdaq.”
“The rise in US bond yields triggering correction in equity markets has been a known threat for some time now. But what triggered this sudden spike in bond yield was the Fed Chief Powell’s statement that inflation may persist for a much longer time. The rise in the dollar index to 93.7 levels indicate profit-booking in stocks and safe-haven buying into the dollar,” said Dr Vijayakumar.
According to him, it is too early to conclude that this is a trend reversal for markets. Investors must remain cautious as at the present elevated valuations, the risk is high, he said.
Financials drag
On the sectoral front, financials witnessed significant losses. Auto, FMCG and IT also dragged while pharma, realty and metals gained.
Nifty Bank and Nifty Financial Services were down 0.64 per cent and 1 per cent, respectively. Nifty Private Bank was down 0.99 per cent while Nifty PSU Bank was trading 2.66 per cent higher. Nifty FMCG and Nifty IT were trading 0.59 per cent and 0.56 per cent lower, respectively. Nifty Auto was down 0.42 per cent.
Meanwhile, Nifty Realty was up 2.76 per cent. Nifty Pharma and Nifty Healthcare Index were up 2.28 per cent and 1.74 per cent, respectively. Nifty Metal was up 1.22 per cent.
The BSE Power Index gained over 3 per cent.
Broader indices
As for the broader market, midcaps gained focus, outperforming the benchmarks.
The Nifty Midcap 50 was up 1.22 per cent while the Nifty Smallcap 50 was down 0.18 per cent. The S&P BSE Midcap was up 0.65 per cent while the S&P BSE Smallcap was up 0.28 per cent at 1:02 pm.
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