Sensex plunges 1,023 pts as private banks drag, Nifty slips below 17,300; HDFC twins lead fall

The domestic benchmarks closed lower for the third straight session on Monday amid continued fund outflow by foreign institutional investors (FIIs) in the backdrop of rising U.S. bond yields and crude oil prices. Caution prevailed in the market today with all eyes on the Reserve Bank of India's policy outcome due on Thursday. Investors feared that policymakers may take note of rising Brent crude prices that hit $95 a barrel last week, raising inflationary concerns.

The BSE Sensex ended 1,023 points, or 1.75%, lower at 57,621, and the NSE Nifty fell 302 points, 1.73%, to 17,213.

In a similar fashion, the broader markets also ended sharply lower. The S&P BSE Midcap index plunged 1.25%, and the S&P BSE Smallcap index fell 0.75%.

The overall market breadth on the BSE was negative, with 2,221 shares declining out of a total of 3,924 traded stocks. As many as 1,532 shares advanced and 171 were unchanged.

“Domestic markets are volatile ahead of the state elections, witnessing a steep fall led by FII selling and weak global cues. The U.S. bourses were under pressure as strong jobs data gave rise to fears of sharper than expected Fed rate hikes, resulting in a spike in the bond yields. The volatility in the market is likely to continue due to high chances of interest rate lift-off by the RBI given domestic inflation and policy tightening by global central banks,” says Vinod Nair, Head of Research at Geojit Financial Services.

Top gainers and losers

Out of the top 30 shares on the BSE Sensex pack, 25 heavyweights closed lower, while the remaining settled in positive terrain. The top loser on the BSE Sensex pack was HDFC Bank, which ended 3.65% lower. Some of the other top laggards include Larsen & Toubro, Bajaj Finance, Bajaj Finserv, Housing Development Finance Corporation, which fell up to 3.2%.

On the gaining side, the state-run Power Grid Corporation of India topped the chart by rising 1.88%. The other top gainers include NTPC, Tata Steel, State Bank of India, and UltraTech Cement, which ended marginally higher.

Barring power and PSU, all sectors end in red

The market witnessed broad-based buying with all sectoral indices, barring power and PSU, ending in negative terrain. The capital goods sector was the biggest loser on the BSE by falling 2.1%, led by Polycab India, Larsen & Toubro, ABB India, Graphite India, and Sona BLW Precision Forgings.

The capital goods sector was followed by the BSE bankex index, which closed 1.87% lower. The private sector lenders HDFC Bank, Kotak Mahindra Bank, IndusInd Bank, ICICI Bank, and Axis Bank were among the top losers in the banking space.

Global markets rebound

Shares in the Asia-Pacific region and in the European market traded mostly higher as robust corporate earnings eased concerns about looming policy tightening by global central banks and geopolitical tensions.

In the Asia-Pacific region, Japan’s Nikkei 225 ended 0.7% lower, while South Korea’s KOSPI dropped 0.2%.

China’s Shanghai Composite was the biggest gainer in the regional market by surging 2%. Markets in China resumed trade on Monday after being closed for a week for the Lunar New Year holidays.

Hong Kong’s Hang Seng index ended a tad higher, Indonesia’s Jakarta Composite rose 1%, and the Straits Times in Singapore also ended 1% higher.