Sensex ends 366 pts lower in volatile trade; Nifty below 16,500; auto, bank stocks extend fall

The domestic bourses ended lower for the second straight session on Thursday, dragged by a record rally in crude prices and sustained selling by foreign investors. Investors also remained on edge ahead of the state elections results and the U.S. Federal Reserve’s policy meeting due next week. The uncertainty about global economic growth prospects amid the ongoing war between Ukraine and Russia, one of the key oil producers, also dented market sentiments.

The benchmark indices opened higher today following firm cues from global peers but soon slipped into negative terrain as investors rolled over their positions due to weekly F&O expiry. The 30-share Sensex ended 366 points or 0.66% lower at 55,103, and the Nifty50 index settled at 16,498, down 108 points or 0.65%.

The broader markets ended on a mixed note, with the BSE midcap index closing 0.64% lower, while the smallcap index settled 0.35% higher.

The market breadth, indicating the overall strength, was weak. Out of 3,698 shares traded on the BSE, 2,148 shares advanced, 1,402 shares declined, and 148 remained unchanged.

"The subdued trend of the domestic market continued however the level of volatility is reducing. Today large caps were more muted, dragged by FIIs selling, compared to the broad market. The release of strategic reserves of oil in India & abroad along with increased output from OPEC is expected to ease crude prices in the future. Additionally, the Indian market will look at the state election exit poll data while the global market on war developments, BoE, and Fed policy meeting status from next week," says Vinod Nair, Head of Research at Geojit Financial Services.

Top gainers and losers

UltraTech Cement, a part of Aditya Birla Group, topped the losers chart by falling 6.5% on the BSE Sensex. The other top laggards include Asian Paints, Dr. Reddy's Laboratories, Maruti Suzuki India, and Hindustan Unilever Ltd. (HUL), which dropped up to 5.2%.

On the flip side, the state-run Power Grid Corporation of India emerged as the biggest gainer on the BSE by rising 3.3%. Tech Mahindra, Wipro, HCL Technologies, and ITC were among other notable gainers on the BSE.

Auto, bank sectors extend fall

Among sectors, rate-sensitive auto and bank space declined the most for the second straight session amid rate hike fears, while power and oil&gas indices were among the biggest gainers. Analysts at ICICI Securities warned that continued surge in commodity prices, especially crude oil, will likely keep India’s CPI inflation above 6% YoY in March-April, nudging the Reserve Bank to raise the repo rate by 50 basis points in Apr-Jul’22.

The BSE auto index ended 2.24% lower, led by Ashok Leyland, Eicher Motors, Maruti Suzuki India, Bosch, and Escorts. The auto index was followed by bankex space, which dropped 1.28%. The biggest losers in the banking sector were Au Small Finance Bank, Bandhan Bank, ICICI Bank, Axis Bank, and State Bank of India.

On the gaining side, power and oil&gas sectors ended up by 2% each, supported by Adani Transmission, Adani Green Energy, Power Grid Corporation of India, NTPC, Adani Total Gas, HPCL, ONGC, GAIL (India), among others.

Global stocks mixed amid Ukraine crisis

Global equities witnessed mixed trade on Thursday, with most of Asian shares ending higher, while European shares edging lower in early deals. In the overnight trade, all three major U.S. indices closed higher as the Federal Reserve chair Jerome Powell eased rate hike fears helped calm investors' nerves which were spooked by Russia’s military operations in Ukraine.

In the Asia-Pacific region, South Korea’s KOSPI emerged as the biggest gainer by rising 1.6%, followed by Japan’s Nikkei 225, which closed 0.7% higher. The Hang Seng index in Hong Kong jumped 0.55%, the Straits Times Index in Singapore rose 0.3%.Thailand’s SET Composite ended 0.37% higher.

In mainland China, the Shenzhen Component and the Shanghai Composite fell 1.1% and 0.1%, respectively.

Meanwhile, European stocks were flashing in red in early deals. Germany’s DAX fell 1%, the U.K.’s FTSE 100 index shed 0.6%. France’s CAC index dipped 0.37%, while Spain’s IBEX 35 plunged 1.8%.