Sensex drops below 59k, Nifty under 17,400 amid volatility

Our Bureau | | Updated on: Dec 05, 2021

Mumbai: People walk past a digital screen, displaying stock prices, on the facade of Bombay Stock Exchange (BSE), in Mumbai, Monday, Feb. 1, 2021. The BSE benchmark Sensex zoomed over 1,700 points and the NSE Nifty reclaimed the 14,000-level driven by gains in financial stocks, following the budget speech. (PTI Photo/Kunal Patil)(PTI02_01_2021_000107A) | Photo Credit: KUNAL PATIL

Volatility index above 17, metals lose shine

Bears kept their grip on the market on Monday with benchmark indices closing in the red amid volatility, witnessing profit-booking across counters, barring FMCG.

Market opened on a weak note, tracking global cues as investors remained cautious ahead of the US Fed meeting, with a possible timeline for tapering to be announced this week. Mounting concerns from the default of Chinese real estate giant Evergrande weighed strongly on investors’ sentiments. Market remained volatile through the day while India VIX, the volatility index rose 14.83 per cent to 17.49. Broader markets also witnessed selling pressure. 

The BSE Sensex closed at 58,490.93, down 524.96 points or 0.89 per cent. It recorded an intraday high of 59,202.56 and a low of 58,389.69. The Nifty 50 was down 1.07 per cent or 188.25 per cent at closing to 17,396.90, near the day’s low of 17,361.80. It hit an intraday high of 17,622.75.

Breadth turns negative

The breadth of the market remained in favour of the decliners with as many as 2,332 stocks declining on the BSE, as compared to 1,041 stocks that advanced while 134 remained unchanged. Furthermore, 325 stocks hit the upper circuit as compared to the 295 stocks that were locked in the lower circuit. Besides, 228 stocks touched a 52-week high level and 25 touched a 52-week low.

Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers, said, “Indian Equity benchmarks continue to trade in red terrain in noon deals as investors booked profits at higher levels, mainly in metal, basic materials and PSU stocks."

Investors turned cautious as all eyes are on the upcoming FOMC meet this week that will provide clarity on the outlook for tapering as well as interest rate timelines, he said. 

"While the Fed's planned reduction of bond purchases has been in focus this year, their view on interest rates will likely be the fresh triggers to move markets world over,” he added.

FPIs turn buyers

However, according to Solanki, the downside remain capped with the markets remaining buoyant as Foreign Portfolio Investors (FPIs) remained net buyers in domestic markets so far in September by investing a net sum of ₹17,822 crore. 

“FPIs invested ₹11,287 crore into equities and ₹5,018 crore in the debt segment on a net basis between September 1 and 17. On the global front; Asian markets were trading lower ahead of a week packed with global central bank meetings, with a torrid session for the world's most indebted property developer China Evergrande. Back home, hotel stocks were in focus on hopes of business revival following unlocking of the economy and pick-up in travel,” added Solanki.

According to Binod Modi, Head Strategy at Reliance Securities, “Defaults of Evergrande sent a shock wave across global equities as possible collapse of Evergrande can lead to cascading impact on financial institutions and corporate. Additionally, it can lead to high cost of borrowing for corporate, which does not augur well for growth of global economy. Therefore, today we saw a massive correction in metals and financials.”

Hindustan Unilever, Bajaj Finserv, ITC, nestle India and HCL Tech were the top gainers on the Nifty 50 while Tata Steel, JSW Steel, Hindalco, UPL and BPCL were the top laggards. 

Metals lose shine

On the sectoral front, all indices except FMCG closed in the red. Metals recorded the highest losses. Nifty FMCG was up 0.91 per cent at closing. 

Meanwhile, Nifty Metal closed 6.60 per cent lower. Nifty PSU Bank was down 4.18 per cent. Nifty Realty was down 2.14 per cent.

Nifty Bank, Nifty Financial Services and Nifty Private Bank closed nearly 2 per cent lower each.

Nifty Auto was down 1.44 per cent. Nifty Consumer Durables was down 1.60 per cent while Nifty Pharma and Nifty Healthcare Index closed 1.80 per cent and 1.77 per cent, lower respectively. Nifty Oil & Gas was down 1.28 per cent.

Broader indices

Broader indices also faced pressure and closed in the red.

Nifty Midcap 50 was down 2.53 per cent while Nifty Smallcap 50 was down 1.78 per cent. The S&P BSE Midcap was down 1.79 per cent while the S&P BSE Smallcap was down 1.84 per cent. 

Published on September 20, 2021
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