Produced by: Tarun Mishra Designed by: Mohsin Shaikh
Indian equity benchmarks witnessed a significant decline on Wednesday, with the 30-share BSE Sensex dropping over 1,000 points and the NSE Nifty giving up the 21,150 level.
All 15 sector gauges compiled by the NSE were in the red, with notable underperformance in Nifty PSU Bank, Nifty Metal, and Nifty Auto sub-indexes, falling 3.66 per cent, 3.67 per cent and 2.18 per cent, respectively.
A surge in Covid-19 cases in India, recording 614 fresh infections in the past 24 hours, the highest since May 21, raised concerns and possibly led to profit booking.
The spike in cases is attributed to the Covid sub-variant JN.1, first identified in Kerala, prompting cautionary measures such as mandatory mask-wearing in Karnataka.
Attacks by Yemen's Houthi militants on ships in the Red Sea caused disruptions, leading to a more than one-dollar rise in oil prices, impacting the market sentiment.
Foreign institutional investors (FIIs) sold Indian shares worth Rs 1,322 crore, while domestic institutional investors (DIIs) bought shares worth Rs 4,755 crore during the previous session. Some traders said on social media that FIIs could have booked profit to go on year-end holidays.
Following seven consecutive weeks of gains, Indian markets appeared overbought, with the Relative Strength Index above the overbought zone of 80 points and that could have led to all-round decline in markets on Wednesday.
The Nifty Vix, an indicator measuring volatility, traded around 12-14 points, reflecting a level of market uncertainty, which showed on the markets.
The sharp fall led to a substantial erosion in BSE market capitalisation, wiping out around Rs 9 lakh crore, with investor wealth falling to Rs 350.01 lakh crore.
Piramal Enterprises experienced an 8% decline as the Reserve Bank of India tightened lending norms for Alternative Investment Funds (AIF). IT stocks, including HCL Technologies, failed to sustain gains after Accenture's results meet expectations, resulting in up to 3% drop. Nifty witnessed significant losses, with major contributors such as Reliance Industries, Larsen & Toubro (L&T), and Infosys impacting overall market sentiment.