Sensex drops over 400 points in mid-session; Nifty tests 17,700 level
Equity benchmark Sensex dropped more than 400 points in late morning trade on Monday due to intense selling pressure in IT, metal and power stocks amid concerns that the US Fed might remain hawkish in raising the interest rate.
Besides, a weak rupee against major rivals and unabated foreign capital outflows dented domestic equity market sentiments, traders said.
Meanwhile, shares of Adani Group firms tumbled further on the bourses, with shares of Adani Enterprises witnessing a fall of 9.50 per cent as investors continue to offload their holdings.
The 30-share BSE index was trading 410.99 points or 0.68 per cent lower at 60,430.89 points in morning deals. Similarly, the broader NSE Nifty slipped 127.15 points or 0.71 per cent to 17,726.90 points.
Kotak Bank was the top loser in the Sensex pack, shedding 1.99 per cent, followed by Infosys, Tata Steel, Bharti Airtel, M&M, HUL and Wipro.
On the other hand, IndusInd Bank, ITC, PowerGrid, NTPC and Titan were the gainers.
''After the Adani crisis broke out, the market has been on a twin track - crash in Adani stocks and stability in the rest of the market. The banking segment, which also came under pressure on fears of the crisis impacting banks, has recovered. The crisis is unlikely to pose any systemic risk to the Indian banking system.
''Globally, the surprise element is the robust job numbers in the US which came at 517,000 in January. This tight labour market in the US indicates continuing strength in the US economy and the possibility of the US recession receding. At the same time the Fed will be forced to remain hawkish for an extended period of time,'' V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
Shares of Adani Total Gas, Adani Power, Adani Green Energy and Adani Wilmar were trading 5 per cent down each on the BSE, while Adani Transmission slipped 10 per cent.
Meanwhile, Adani Ports and Special Economic Zone was trading marginally higher at Rs 501.50, up 0.53 per cent.
In addition, other Adani Group stocks, such as Ambuja Cements tanked 3.28 per cent, ACC dropped 0.82 per cent and NDTV fell 4.98 per cent.
Shares of ITC Ltd on Monday gained over 1 per cent in the morning trade after the firm reported a 23.09 per cent increase in its consolidated net profit to Rs 5,070.09 crore for the third quarter.
On Friday, the Sensex surged 909.64 points or 1.52 per cent to settle at 60,841.88 points while the Nifty advanced 243.65 points or 1.38 per cent to end at 17,854.05 points.
Elsewhere in Asia, bourses in Hong Kong, Shanghai and Seoul were trading with losses in mid-session deals while the Tokyo market was in the positive territory on Monday.
Wall Street ended lower on Friday.
Meanwhile, international oil benchmark Brent crude rose 0.25 per cent to USD 80.14 per barrel.
Foreign Institutional Investors (FIIs) were net sellers in capital markets as they offloaded shares worth Rs 932.44 crore on Friday, according to exchange data.
''Meanwhile, fed-funds futures show traders see a 25 basis point interest rate hike by the Fed in March as nearly assured and raised the odds of another 25 basis point rise in May, putting market expectations for the peak in interest rates nearer the Fed’s forecast above 5 per cent,'' HDFC Securities said in a note.
Investors will also be watching the Reserve Bank of India's monetary policy decision later this week.
With retail inflation showing signs of softening and the US Fed moderating the pace of increase in its benchmark interest rate, the RBI is likely to settle for a smaller 25 basis points repo rate hike.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)