Sensex plunges over 500 pts; Nifty below 25,350 as FMCG, bank stocks drag

Indian equity benchmarks declined on Friday despite continued gains in IT stocks, as FMCG and banking counters led the losses. The Sensex slid over 500 points to an intraday low of 81,733, while the Nifty50 dropped over 180 points to slip below the 25,350 level.

While Maruti Suzuki and IndiGo shares dropped more than 1%, Hindustan Unilever, Bharti Airtel, Mahindra & Mahindra (M&M), Kotak Mahindra Bank, and Reliance Industries (RIL) declined nearly 1% each on the Sensex.

IT stocks like Infosys, Tech Mahindra, HCL Tech, and TCS led gains, rising up to 2%.


Global markets

Wall Street’s tech-heavy Nasdaq Composite index ended lower on Thursday as the tech rally failed to hold on to the momentum. World’s most valuable company, Nvidia, saw its share price decline by 5% a day after rising sharply, following its better-than-expected January quarter results and high revenue forecast for the ongoing quarter.

Google-parent Alphabet shares declined nearly 2%, while Amazon shares were down more than 1%. AMD shares dropped more than 3%, while Salesforce shares rose more than 4% on strong earnings. The Nasdaq Composite index closed more than 1% lower.

Japan’s Nikkei 225 is up 0.29%, while South Korea’s Kospi declined around 0.7%, as seen at 9.20 am. Hang Seng and Shanghai Composite, meanwhile, fell 1.5% and 0.17% respectively.

Crude impact

Crude oil prices declined amid easing supply worries after the US and Iran held indirect negotiations over the latter’s nuclear program. However, the two countries have not concluded a deal, leaving room for worries after heightened tensions and expectations of a possible military conflict as US has gathered a massive fleet of aircraft and warships in the region.

Brent crude declined 5 cents to trade at $70.70 per barrel, while the WTI Crude futures were down around 2 cents to trade at $65.19 per barrel.

The Indian rupee opened at $90.9475 against the US dollar, slightly lower than the previous closing level of $90.9050.

According to Bajaj Broking, Nifty has immediate resistance placed at 25,650. Going ahead only a move above the same will signal a pause in the current corrective trend, according to the domestic brokerage. “Index is seen consolidating in the range of 25,350-25,900 in the last 9 sessions. A breakout or a breakdown below this range will signal next direction trend. Volatility is likely to remain elevated amid uncertain global cues. A breach below Tuesday low 25,327 will open further downside towards the 200 days EMA and the previous gap up area placed around 25,100-25,200,” it added.

Heavy selling by FIIs

The fall in stock markets comes after heavy selling by foreign investors dampened sentiment. Foreign institutional investors (FII) net sold Indian equities worth nearly Rs 3,466 crore earlier yesterday, according to data on NSE.

Domestic institutional investors however remained net buyers of Indian equities, purchasing shares worth Rs 5,032 crore on Thursday.