Banking stocks drag Sensex, Nifty lower; Hang Seng, KOSPI lead Asian market fall

Indian benchmark indices remained under pressure in afternoon trade on Tuesday, with the Sensex falling 516 points and the Nifty slipping below 23,700 as selling intensified in heavyweight financial and energy stocks. Weak cues from Asian peers also weighed on sentiment, with Japan’s Nikkei 225, Hong Kong’s Hang Seng and South Korea’s KOSPI leading the declines.

At the time of reporting, the BSE Sensex was down 516.67 points, or 0.68%, at 75,616.14 at 2:41 pm. The index touched an intraday low of 75,553.35, declining as much as 580 points from the day’s high.

Similarly, the Nifty 50 fell 131.25 points, or 0.55%, to 23,647.90 at 2:45 pm after hitting a low of 23,623.10.

The broader market showed some resilience, with the Nifty Midcap 100 rising 0.17% and the Nifty Smallcap 100 gaining 0.12%. Sectorally, media, pharma, healthcare and FMCG stocks outperformed, while financial services and oil & gas remained under pressure.

Banking stocks lead fall

Banking stocks were among the biggest drags on the benchmark indices. ICICI Bank fell 1.97%, while Axis Bank declined 1.65% and HDFC Bank slipped 0.92%. Reliance Industries was down 1.26%, while UltraTech Cement fell 1.31%.

Among other major laggards, Maruti Suzuki declined 0.94%, Sun Pharma 0.89%, Tata Steel 0.81%, Bharti Airtel 0.76% and M&M 0.70%.

On the other hand, defence major BEL gained 1.67%, emerging as the top Sensex gainer, while Adani Ports rose 1.21% and Hindustan Unilever advanced 0.95%.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market is now in the fifth week of a “slow but steady downtrend”, citing elevated crude prices, selling in IT stocks, concerns over a possible Fed rate hike this month and strong IPO activity that is absorbing liquidity.

He said the macro factors driving the downtrend continue to persist, suggesting that weakness could extend in the near term. However, the decline is also creating opportunities in large-caps, where valuations have become more attractive despite improving fundamentals.

Vijayakumar also pointed to the relative strength of mid- and small-caps, saying steady monthly SIP inflows continue to favour these segments despite elevated valuations. He expects a possible mean reversion in these segments to support a rotation towards fundamentally sound large-caps.

Asian markets remain under stress

Asian markets were also largely lower on Tuesday, with Japan’s Nikkei 225 leading the declines, while Chinese and Southeast Asian equities bucked the trend.

The Nikkei 225 fell 629.84 points, or 0.96%, to 65,770, while Singapore’s Straits Times declined 0.43% to 5,767.45. Hong Kong’s Hang Seng slipped 0.54% to 25,276, Taiwan’s benchmark fell 0.47% to 47,105.78 and South Korea’s KOSPI declined 0.59% to 6,954.52.

In contrast, Thailand’s SET Composite edged up 0.19% to 1,621.89, Indonesia’s Jakarta Composite gained 1.01% to 6,686.44, while the Shanghai Composite rose 0.20% to 3,940.55.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)