Sensex tanks 1,053 points, Nifty settles below 21,250; ZEEL crashes 33%; Cipla up 7%

Domestic equity markets gave up initial gains on Tuesday and went to slide 'one-way' as the session progressed. A slew of domestic factors came into play as the headline indices settled sharply lower for the day. Sebi's new ownership norms for FIIs, high valuations in select pockets, muted Q3 earnings and profit booking ahead of budget weighed on the sentiments at Dalal Street.

BSE Sensex crashed about 1,700 points from day's high, while NSE's Nifty50 gave up more than 510 points. Investors lost a total of Rs 8.37 lakh of the notional wealth as the total market capitalization of the all BSE-listed companies dropped to Rs 366.03 lakh crore compared to Rs 374.40 lakh crore in the previous trading session.

For the day, BSE's Sensex tanked 1,053.10 points, or 1.47 per cent, to settle at 70,370.55. NSE's Nifty50 nosedived 333 points, or 1.54 per cent, to end the day at 21,238.80. Broader markets underperformed the headline peers as the BSE midcap and smallcap indices plunged about 3 per cent each. Fear gauge India VIX spiked more than 7.6 per cent to 14.85-mark.

Despite positive momentum in the global market, selling pressure continued today in the domestic markets mainly on the back of news that is worrying FIIs, as SEBI has drafted paper to impose tightened ultimate beneficial ownership norms for overseas investors with effect from February 1, said Prashanth Tapse, Senior VP (Research), Mehta Equities

"The recent selloff in Indian markets has been triggered by offloading by FIIs in the past few sessions and today's slump could be due to mixed earnings outcome and higher valuation worries. There are indications that rate cuts in the US may not happen soon because of inflation playing truant there, and hence investors are getting uncomfortable with the current valuations," he said.

Barring the Nifty pharma and healthcare indices, all other sectoral indices settled in red. Both the defensive sectors gained 1.65-1.8 per cent for the day. Among the laggards, Nifty media index was down about 13 per cent, while the Nifty realty index crashed 5.3 per cent. The Nifty PSU Bank index was down 4.1 per cent for the day.

In the Nifty50 pack, IndusInd Bank tumbled about 6.2 per cent after Q3 results. Coal India crashed 5.6 per cent, while SBI Life Insurance Company and ONGC shed more than 4.5 per cent each. Adani Ports and State Bank of India declined over 4 per cent each. Among the gainers, Cipla surged about 7 per cent, while Sun Pharma rose 4 per cent. Bharti Airtel gained 3 per cent.

The market witnessed a continuous decline today, abruptly turning negative despite a positive start, mainly due to substantial selling in heavyweight sectors, particularly finance. Mid and small caps witnessed more decline compared to the main indices, said Vinod Nair, Head of Research, Geojit Financial Services.

"Selling by FIIs due to reasons like high valuation and mixed results for the earnings season so far, along with recent escalations in tensions in the Middle East and Red Sea, prompted the investors to book profit from the recent rally. Going forward, markets are likely to witness stock-specific actions during the ongoing earnings season," he said.

A total of 4,067 shares were traded on BSE on Tuesday, of which 2,979 settled with cuts. 950 stocks ended the session with gains while 138 shares remained unchanged. During the day, 351 shares hit their upper circuit, whereas 445 shares tested the lower circuit levels for the day.

In the broader markets, Zee Entertainment Enterprises plunged about 33 per cent after cancellation of its deal with Sony. Another Essel Group firm Zee Media dropped 14 per cent for the day. IRCON International tumbled 14 per cent, while Railtel Corporation of India slid 13 per cent on the back of profit booking ahead of budget.

Among the gainers, Visaka Industries surged 15 per cent, while Salasar Techno Engineering continued its rally and surged about 14 per cent for the day. Borosil Renewables settled 12 per cent up for the day, while Speciality Restaurants was up 10 per cent for the day. Vikas Lifecare advanced 8 per cent for the day.

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