The stock market sell-off intensified on Tuesday, remaining under severe pressure for the fifth consecutive session. Domestic benchmarks slumped over 1.5 per cent today but the pain was much deeper in the broader indices (small- and mid-cap stocks) with Nifty Midcap 100 and Nifty Smallcap 100 cracking 3.53 per cent and 3.97 per cent, respectively.
A few market experts warned investors against looking for an opportunity in broader indices as there could be further pain ahead. "Investors should remain on the sidelines and not look for any opportunity in benchmarks or broader indices at current levels. Stay away and wait for the right time, at least till March as the selling seen in stocks has not been reflected in the index. There are many stocks in small- and mid-caps which have corrected up to 50 per cent," market expert Raghvendra Singh told Business Today.
Valuations of small- and mid-caps continue to be excessive, underscored VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "US President Donald Trump's latest decision to impose 25 per cent tariffs on steel and aluminium will impact countries like Mexico, Brazil, South Korea and Vietnam more. Metal prices will remain soft for long," he also stated.
"The impact of these tariffs can put upside pressure on inflation. US Federal Reserve chair's upcoming testimony might offer some guidance on all these fronts," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, adding that the market continued to remain under pressure amidst FII (foreign institutional investor) outflows.
The entire Sensex basket was trading in the red today, with Zomato Ltd, Tata Motors Ltd, Power Grid Ltd and Larsen & Toubro (L&T) falling up to 5 per cent. Kotak Mahindra Bank, Tata Steel, HUL, Bajaj Finserv, Adani Ports, UltraTech Cements and Sun Pharma declined over 2 per cent each.
Stocks such as Coal India Ltd, GAIL Ltd, MRF Ltd, Tata Motors Ltd, Varun Beverages Ltd, Gujarat Gas Ltd and Star Health hit their one-year lows today. Wockhardt, Vakrangee, KPI Green Energy Ltd and Jai Corp Ltd were among those hitting their lower circuit limits.
On NSE, all 19 sub-indices were down. Nifty Realty, Nifty Consumer Durables, Nifty FMCG and Nifty Auto fell sharply.
FIIs sold Rs 2,463.72 crore worth of shares on a net basis during the previous session, while domestic institutional investors (DIIs) purchased Rs 1,515.52 crore worth of equity, exchange data showed.