Stock markets on free-fall, BSE, NSE nosedive , banking, oil stocks hit worst

Benchmark Sensex nosedived 1,628 points or 2.23 per cent on Wednesday, marking its biggest single-day slide in more than one-and-a-half years following an intense sell-off in banking, metal and oil shares triggered by weak global trends.

The 30-share BSE Sensex plunged 1,628.01 points or 2.23 per cent to settle at 71,500.76 with 24 of its constituents ending in the red. During the day, it plummeted 1,699.47 points or 2.32 per cent to a low of 71,429.30.

The Nifty tanked 460.35 points or 2.09 per cent to settle at 21,571.95, falling for the second day in a row.

Key stock indices suffered their worst single-day losses in percentage terms since June 13, 2022.

The heavy fall in the markets comes on the back of a recent record-breaking rally. The BSE benchmark hit its all-time high of 73,427.59 on Tuesday, and the Nifty also reached its lifetime peak of 22,124.15 on the previous day.

Among the Sensex firms, HDFC Bank fell over 8 per cent after its December quarter earnings failed to cheer investors.

HDFC Bank on Tuesday reported a 2.65 per cent rise in consolidated net profit of Rs 17,258 crore for the October-December period against Rs 16,811 crore in the preceding September quarter.

Tata Steel, Kotak Mahindra Bank, Axis Bank, ICICI Bank, JSW Steel, Bajaj Finserv, Maruti, IndusInd Bank and State Bank of India were among the other major laggards.

HCL Technologies, Infosys, Tech Mahindra, Tata Consultancy Services, Nestle and Larsen & Toubro were the gainers.

"A nosedive correction in banking stocks, along with concerns over delays in US FED rate cuts, impacted market sentiments. Given the elevated valuations, coupled with the fact that optimism regarding earnings and GDP growth for FY24 is already reflected in the market, triggered the correction," said Vinod Nair, Head of Research, Geojit Financial Services.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled lower.

European markets were also trading with sharp cuts. The US markets ended in negative territory on Tuesday.

"Today’s market fall is led by banks on the back of HDFC Bank results, showing heightened levels of credit/deposit (CD) ratio beyond RBI’s comfort levels. This is the case with most other banks as well. Thus, the markets expect either margin pressure, in case banks go in for aggressive deposit mobilization, a slowdown in lending growth, or both. This development can lead to some de-rating of the sector.

"After the significant up move we have witnessed recently, markets are taking a breather, especially since market valuations are higher than historical multiples," said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

Snapping its five-day winning run, the BSE benchmark declined 199.17 points, or 0.27 per cent, to settle at 73,128.77 on Tuesday. The Nifty ended lower by 65.15 points, or 0.29 per cent, at 22,032.30.

Global oil benchmark Brent crude declined 1.84 per cent to $76.85 a barrel.

Foreign Institutional Investors (FIIs) bought equities worth Rs 656.57 crore on Tuesday, according to exchange data.

Rupee slipped 1 paisa

The rupee slipped 1 paisa to settle at 83.13 (provisional) against the US dollar on Wednesday amid massive selling in domestic equity markets and a strong greenback overseas.

However, renewed foreign capital inflows and a sharp fall in crude oil prices in the international markets supported the local currency and capped the losses, forex dealers said.

At the interbank foreign exchange, the domestic currency opened at 83.13 and traded in the range of 83.07 to 83.17 against the dollar.

The unit finally settled at 83.13 (provisional) against the greenback, down 1 paisa from its previous close.

On Tuesday, the rupee declined 26 paise to settle at 83.12 against the US dollar.

"The rupee traded flat...with the dollar index rising and sell off in capital markets rupee weakness can continue towards 83.25-83.30.

"US retail data will be in focus in the evening, which can give dollar new triggers. The range for rupee can be seen between 82.90-83.30," Jateen Trivedi, VP Research Analyst, LKP Securities, said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.06 per cent higher at 103.05 on Wednesday.

Analysts attributed gains in the US dollar to safe-haven demands amid concern over disruption in global trade through the Red Sea route.

Brent crude futures, the global oil benchmark,declined 1.84 per cent to $76.85 a barrel.

Brent crude down

Crude oil futures on Wednesday declined 0.92 per cent to Rs 5,948 per barrel as participants trimmed their positions on low demand.

On the Multi Commodity Exchange, crude oil for January delivery fell Rs 45 or 0.92 per cent to Rs 5,948 per barrel with a business volume of 4,874 lots.

Globally, West Texas Intermediate crude oil traded 1.75 per cent lower at $71.13 per barrel, while Brent crude declined 1.84 per cent to $76.85 a barrel.

Glod loses shine

Gold prices on Wednesday declined Rs 153 to Rs 61,862 per 10 grams in futures trade as speculators reduced their positions.

On the Multi Commodity Exchange, gold contracts for February delivery traded lower by Rs 153 or 0.25 per cent at Rs 61,862 per 10 grams in a business turnover of 8,018 lots.

Analysts attributed the fall in gold prices to weak global cues.

Globally, gold was trading 0.23 per cent lower at USD 2,025.50 per ounce in New York.