Sensex dives 551 points, Nifty settles below 19,700; PSU stocks bleed, IIFL Sec jumps 15%

After a day's hiatus, bears were back on Dalal Street as domestic benchmark indices settled sharply lower on Wednesday. Global sentiments including the war crisis in the Middle East and Powell's upcoming speech on Thursday dented the market sentiments. Traders opted for a risk-off approach during the session.

For the day, the 30-share pack BSE Sensex crashed 551.07 points, or 0.83 per cent, to end the session at 65,877.02. NSE's Nifty50 dropped 140.40 points, or 0.71 per cent, to end the day at 19,671.10. Broader markets performed in-line with the headline peers as BSE midcap and smallcap indices posted significant cuts. Fear gauge India VIX jumped about 3 per cent to 11-mark.

Geopolitical tensions in the Middle East due to the raging war between Israel and Hamas spooked Indian markets as investors turned risk-off and hammered stocks at will. The market is more concerned about surging crude oil prices as this could hurt inflation and may lead to interest rates remaining up for longer, said Shrikant Chouhan, Head of Research (Retail), Kotak Securities.

"Technically, the Nifty faced resistance near 19,850-level and corrected sharply. It has now formed double top formation on daily and intraday charts and bearish candle on daily charts, which is indicating further weakness from the current levels. As long as the index is trading below 19,800, the weak sentiment is likely to continue and could slip till 19,600-19,575," he added.

On a sectoral front, the Nifty pharma and healthcare indices posted decent gains. Barring these, only Nifty auto and media indices managed to post gains. Among the laggards, the Nifty PSU Bank index dropped about 2 per cent, while the Nifty financial services, private bank, consumer durables and oil & gas indices dropped about a per cent each.

In the Nifty50 pack, Bajaj Finance tumbled 3 per cent, while Bajaj Finserv crashed 2 per cent. NTPC, HDFC Bank, Reliance Industries, Axis Bank, Tata Consumer Products, ICICI Bank, Tech Mahindra, Kotak Mahindra Bank, IndusInd Bank and Grasim dropped more than a per cent each for the day.

Among the gainers, Cipla rose about 4 per cent, while Dr Reddy's Laboratories and Tata Motors jumped about 2 per cent each. Sun Pharmaceuticals added more than a per cent. SBI Life Insurance, HDFC Life Insurance and ONGC were the other gainers on the pack.

The market continues to remain range bound as earnings fail to drive any investor enthusiasm. The focus continues to remain on management commentary with regard to 2H performance which until now has not been encouraging. The market is showing early signs of fatigue within the mid & smallcap space, said Jaykrishna Gandhi, Head- Institutional Equities, Emkay Global Financial Services.

"While the geopolitical events have not yet cracked the Indian market, it has definitely slowed the momentum. The Indian markets hence appear relatively better placed compared to its regional peers. US markets have caught a bit of a tail wind with the Fed speakers highlighting that there is a lower need to raise rates going forward," he said.

A total of 3,843 shares were traded on BSE on Wednesday, of which 2,268 settled with cuts. 1,436 stocks ended the session with gains while 139 shares remained unchanged. During the day, 11 shares hit their upper circuit, whereas only five shares tested the lower circuit levels for the day.

In the broader markets, Housing & Urban Development Corporation (HUDCO) shed 11 per cent as the government is looking to sell stake in the company. MMTC hit a lower circuit of 10 per cent amid reported shut-down. Other multibagger PSUs like KIOCL and ITI dropped up 9 per cent, while Shreyas Shipping also tanked 9 per cent as its delisting counter-offer failed again.

Among the gainers, IIFL Securities surged about 15 per cent, while Sastasundar Ventures jumped more than 13 per cent. Jaiprakash Associates gained 12 per cent, while Authum Investment & Infrastructure, Huhtamaki India and Nucleus Software Exports rose 10 per cent each.

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