Sensex ends 566 pts lower, Nifty holds 17,800; HDFC twins, tech stocks drag

The domestic bourses ended lower for the second straight session on Wednesday, weighed down by selling in IT and tech space along with index heavyweights such as HDFC and HDFC Bank. The market sentiment was also dented by weak global cues after hawkish comments from US Federal Reserve governor Lael Brainard.

The 30-share Sensex dropped 566 points, or 0.94%, to settle at 59,610, while the Nifty50 ended at 17,808, down 150 points or 0.83%.

Bucking the trend, the broader market ended on a positive note, with the BSE midcap and smallcap indices gaining 0.41% and 0.38%, respectively.

The overall market breadth on the BSE was positive, with 2,290 shares advancing out of a total of 3,775 traded stocks. As many as 1,363 shares declined and 122 were unchanged.

“The main indices are muted due to drop in HDFC group stocks after the rally, the subdued performance of IT sector in anticipation of weak results on a QoQ basis and weak global cues. The broad market has maintained its momentum due to the good performance of Mid & Small caps,” says Vinod Nair, Head of Research at Geojit Financial Services.

“We can expect volatility in the near-term ahead of the RBI policy meet which is expected to hold the rates but increase inflation forecast,” he added.

Top gainers and losers

Out of top 30 shares on the BSE Sensex pack, 10 index heavyweights closed in green, while remaining 20 settled in negative terrain. Private sector lender HDFC Bank and housing finance company HDFC were the worst performers with more than 3% loss as investors resorted to profit booking after recent rally on proposed merger of HDFC twins. The other top laggards include IT companies - HCL Technologies, Tech Mahindra, and Infosys - falling up to 2%.

On the gaining side, state-run NTPC topped the chart by rising 1.9% after it signed a deal with Gujarat Gas for an initiative to blend green hydrogen with the piped natural gas (PNG) supplied by the latter. The other notable gainers include Tata Steel, Power Grid Corporation, Bharti Airtel, and Nestle India.

IT, Tech stocks drag

Among sectors, IT and technology indices were the worst performers, while power and metal space shined. The BSE IT index fell 1.4%, while the BSE Teck index slipped 1.2%, led by MphasiS Ltd, Allsec Technologies, Zee Entertainment Enterprises, HCL Technologies, Tech Mahindra, and Sterlite Technologies.

Meanwhile, power and metal indices gained 1.84% and 1.54%, respectively. The power sector emerged as the biggest gainer, led by index heavyweights Tata Power Company, Adani Power, NTPC, Torrent Power, and Power Grid Corporation.

Global stocks retreat on hawkish Fed comment

On the global front, shares in the Asia-Pacific region and in Europe retreated amid a sell-off in technology stocks amid a spurt in bond yields and fear of an aggressive policy stance by the U.S. Federal Reserve. The market sentiment was spooked after Federal Reserve Governor Lael Brainard said she expects a rapid increase in the interest rate and a cut in the Fed's balance sheet to control inflation.

In the Asia-Pacific region, regional heavyweight Hang Seng, the benchmark index of Hong Kong, was the worst performer with a 1.9% loss. Japan’s benchmark index Nikkei 225 closed 1.6% lower, while South Korea’s KOSPI dropped 0.9%.

In a similar trend, Taiwan’s Weighted index fell 0.6%, while the Straits Times Index in Singapore slipped 0.65%. Australia’s ASX 200 index and Indonesia’s Jakarta Composite shed 0.5% each.

In mainland China, the Shenzhen Component fell 0.45%, while the Shanghai Composite ended flat with a positive bias.

Meanwhile, European markets were flashing in red in early deals amid U.S. rate hike fears and concern about the Russia-Ukraine crisis. Germany’s DAX fell 1.3%, while the U.K.’s FTSE 100 index slipped 0.5% in opening trade. France’s CAC index slid 1.2%, while Spain’s IBEX 35 dived 0.9%.