Sensex, Nifty open lower; HAL tanks 6% as OFS kicks off; Sirca Paints rises 7%

Domestic equity markets opened lower on Thursday and extended their losses as the session progressed on the back of muted global cues. Asian peers were down, whereas US stocks settled sharply lower in the overnight trade after the US Federal Reserve increased interest rates by 25 basis points (bps).

At 9.25 am, the 30-share pack BSE Sensex was trading 306.21 points, or 0.53 per cent, lower at 57,908.38, whereas NSE's Nifty50 dropped 78.40 points, or 0.46 per cent, to 17,073.50. Broader markets outperformed the headline peers but were trading with mild cuts. Fear gauge India VIX eased slightly to 14.78-level.

Index has formed a bearish candle on the daily chart as the closing was lower than opening levels but formed higher tops and higher bottoms for the third consecutive session. The momentum oscillator relative strength index is in a bullish crossover which indicates positive bias, said YES Securities in its morning note.

"For gaining further strength, the index has to cross and sustain above 17,255 levels form where it can extend up to 17,460 levels at 200 DMA’s. Till then, the levels of 17,000 followed by 16,800 could act as support," it added.

Among the sectors, only the Nifty Pharma index was able to hold some gains. On the downside, Nifty Index topped among the laggards, followed by PSU Bank counters. Financial Services, Private Banking stocks and FMCG were the other key losers.

In the Nifty50 pack, Asian Paints topped among the losers, falling about 3 per cent. Blue-chip IT stocks including HCL Tech, Wipro and Infosys dropped up to 2 per cent in the early trade. UPL, Power Grid, HDFC and Reliance Industries were down a per cent, each.

Among the gainers, IndusInd Bank, HDFC Bank and Hero MotoCorp jumped up to a per cent, each. Adani Ports and Larsen & Toubro, Divis Labs and Sun Pharma were the other key gainers in the NSE's barometer

The Fed is trying its best to balance inflation control with financial stability. But the late-day sell-off was triggered by Treasury Secretary Janet Yellen’s comment that they are not considering blanket deposit insurance, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"This kind of gyrations happen in a highly volatile whipsawing market driven by daily doses of news. The Fed has signalled perhaps one more rate hike this year and then a pause. Investors need to expect only moderate returns from the market in the present context of high-interest rates" he said,

In the broader markets, Hindustan Aeronautics plunged more than 6 per cent as the government initiated a process to sell up to 1.75 per cent (58.51 lakh) equity shares via offer-for-sale (OFS) on March 23 and March 24 at a floor price of Rs 2,450 per share. AGI Greenpac and Vakrangee declined 5 per cent, each.

On the other hand, Precision Wire Systems gained about 9 per cent, whereas Sirca Paints India surged 7 per cent as the paint maker's board will consider a bonus share issue on 29 March 2023. Nureca and Sun Pharma Advanced Research jumped 6 per cent, each.

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Also read: HAL shares plunge 6% as two-day OFS kicks off; issue sees 3% subscription so far