Sensex sheds 632 points, Nifty50 falls 187 points as PSU bank, financial services and IT stocks drag

• India’s benchmark indices Sensex and Nifty50 tanked on Tuesday, with most sectoral indices closing the day in the red.
• While Sensex fell 632 points, Nifty50 fell 187 points as PSU bank, financial services and IT stocks dragged the indices down.
• Mixed global sentiments and earnings season kept traders on the edge, with the India VIX (volatility index) climbing 5.9% on Tuesday.

India’s benchmark indices Sensex and Nifty50 tanked on Tuesday, with most sectoral indices closing the day in the red, weighed by declines in PSU bank, financial services, IT and metal stocks that dragged the indices down.

All sectoral indices except auto and healthcare closed the day in the red, with the PSU bank index declining the most.

Sensex closed 1.04% or 632 points lower at 60,115, while Nifty50 slipped 1.03% or 187 points down at 17,914.

Among sectoral indices, the PSU bank index declined the most at 2.67%, followed by financial services which declined 1.37%, while IT declined 0.85% and metal fell 0.75%. In the Nifty50 index, 33 out of 50 stocks registered a decline, while 22 out of the 30 stocks on Sensex closed in the red.

The fall in the Nifty IT index comes a day after IT services major TCS reported lower than expected revenue growth of 13.5% year-on-year in constant currency terms.

Shares of most Adani Group companies were under pressure today with Adani Enterprises sinking nearly 6% being the top loser on Nifty50. This comes as several media reports said Adani Enterprises is eyeing a follow-on public offer (FPO) to raise nearly ₹20,000 crore in January. Gulf sovereign wealth funds (SWF) and financial institutions, including International Holding Company (IHC), are likely to be amongst the biggest investors.

A report by the Economic Times said IHC is reportedly planning to acquire 10% to 15% of the issue by investing between ₹2,000 crore and ₹2,800 crore.

On the other hand, Tata Motors was the top performer on the 50-stock index as it climbed 5.92% after its subsidiary Jaguar Land Rover (JLR) reported a 13% increase in its wholesales and reported a free cash flow of £485 million (approx. ₹3,992 crore).

Meanwhile, weakness in the US dollar resulted in the rupee closing below the 82 level for the first time in the last one month. Rupee gained 57 paise to close at 81.78 against the US dollar on Tuesday.

Here are the top gainers and losers in the Nifty50 index
Source: NSE, as at 3:30 p.m., January 10, 2023

Earlier on Monday, both Sensex and Nifty50 posted a bounceback, snapping their three day losing streak, with most of the indices ending the day in green. The 30-stock Sensex closed the day with a gain of 847 points at 60,747, while the 50-stock Nifty50 closed 242 points up at 18,101.

"Powell is unlikely to depart from the Fed’s hawkish stance but if the CPI data of Wednesday confirms the declining trend in inflation, the market will get ahead of the Fed and will start pricing in a terminal rate below 5% and possible rate cuts by end 2023,” said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

US markets erase gains, Asian markets mixed
In the US, ongoing worries about inflation erased most of the gains made by the benchmark S&P 500 index, which closed marginally lower by 0.08%, while the Dow Jones Industrial Average declined 0.34%. On the other hand, the tech-heavy Nasdaq closed in the green with a gain of 0.63%.

Demand and recessionary concerns led to a cool down in crude oil prices, with the Brent crude oil falling below the $80 per barrel level to $79.2.

Asian markets were mixed on Tuesday, reflecting the indecisive market sentiment. The Hang Seng index was down 0.27%, while Shanghai Composite was 0.21% lower. On the other hand, Nikkei 225 was up 0.78% and Taiwan Weighted index was up 0.34%.

“Global shares eased on Tuesday as investors took profit on the gains from the past two weeks after comments from two Federal Reserve officials injected a note of caution over the U.S. rate outlook, cracking equities. Optimism over China reopening has faded,” said Deepak Jasani, head of retail research at HDFC Securities.

Meanwhile, Brent crude oil price gained 0.26% at 79.86 per barrel as China announced the reopening of its borders, boosting fuel demand outlook.

Foreign institutional investors (FIIs) pulled out ₹2,109 crore from equity markets on Tuesday while domestic institutional investors (DIIs) bought ₹1,806 crore.

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