The domestic bourses ended lower on Wednesday, weighed down by selling in auto and banking space along with index heavyweights such as HDFC, Kotak Mahindra Bank, Bharti Airtel, Sun Pharma and Maruti Suzuki India. The market sentiment was also dented by mixed cues from global peers amid inflationary pressures triggered by high commodity prices.

Paring early gains, the 30-share Sensex ended 304.5 points, or 0.5%, lower at 57,685. On the NSE, the Nifty50 closed at 17,246, down 70 points or 0.4%. The broader market ended mixed, with the BSE midcap index gaining 0.39% and smallcap index ending flat with negative bias.

The overall market breadth on the BSE was weak, with 2,048 shares declining out of a total of 3,798 traded stocks. As many as 1,592 shares advanced and 158 were unchanged.

"After the recent rally, market is getting cautious. Volatility is back due to inflationary pressures triggered by supply constraints, while consistently rising input costs and fall in demand due to surge in Covid cases in parts of the world, war and high commodity prices are impacting earnings growth, which can lead to downgrade in outlook,” says Vinod Nair, head of research at Geojit Financial Services.

“An end to the war and rise in supply can help India to sustain it resilience or else it will be a challenge in the short-term," he added.

Among individual stocks, One97 Communications, the parent company of Paytm, hit a fresh low even after the company told BSE that its business fundamentals remain robust and there is no information that may have an untoward effect on its share price. The clarification comes as the share price of the company continued to see sharp declines, reaching a new all-time low of ₹536.20 during intraday trade.

Shares of Hero MotoCorp dropped 1.2% after the Income Tax Department raided offices and residential premises of chairman and CEO of the group, Pawan Munjal, as well as locations related to other top officials of the company across Delhi and Gurugram. The action against the largest two-wheeler manufacturer in India is part of investigation into alleged tax evasion by the company.

Bank, realty stocks drag

Among sectors, metal and power indices were among the best performers, while rate sensitive bank and realty space saw maximum selling activities.

The BSE bankex index closed 0.8% lower, led by heavyweights such as Kotak Mahindra Bank, HDFC Bank, Axis Bank, State Bank of India, and Bank of Baroda.

The BSE realty index was also among the worst performers by falling 0.72%. The realty space was dragged by Bajaj Auto, Maruti Suzuki India, Mahindra & Mahindra, Bosch and Tube Investments of India.

Top gainers and losers

Pharma major Dr. Reddy's Laboratories was the top gainer on the BSE Sensex pack, ending 2.3% higher. The other notable gainers include Tata Steel, ITC, Power Grid Corporation of India and NTPC, which rose up to 2.15% on the BSE.

On the losing side, mortgage lender Housing Development Finance Corporation (HDFC) topped the chart with a 2.36% loss. Among others, Kotak Mahindra Bank, Bharti Airtel, Sun Pharmaceutical Industries and Maruti Suzuki India fell up to 2.25%.

Asian markets end higher, European stocks skid

Shares in the Asia-Pacific region ended mostly higher today, while European stocks edged lower in early trade on Wednesday. The market sentiment was lifted amid hopes that the U.S. Federal Reserve's plan to raise interest rates will help control inflation. Investors also kept a close eye on Russia-Ukraine crisis, which is keeping oil prices elevated.

In the Asia-Pacific region, most of the stocks extended rally on Wednesday following strong finish at Wall Street overnight. Japan’s benchmark index Nikkei 225 rallied 3% after the government fully lifted the Covid-related emergency measures.

Hong Kong’s Hang Seng index rose 1.2%, South Korea’s KOSPI gained 0.9%, and Australia’s ASX 200 index added 0.5%.

In mainland China, the Shenzhen Component climbed 0.7%, while the Shanghai Composite soared 0.35%.

Meanwhile, European markets edge lower in opening trade amid economic uncertainties caused by the ongoing Russia-Ukraine war. Germany’s DAX fell 0.3%, while the U.K.’s FTSE 100 index rose 0.2% in early deals. France’s CAC index slid 0.2%, while Spain’s IBEX 35 dived 0.7%.

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