Sensex snaps 2-day rally, falls 284 pts; Nifty below 18,800; investors lose Rs 2.05 lakh crore

Mirroring weak global cues following a retreat on Wall Street after the Federal Reserve Chair indicated that inflation still isn't under control, Indian equity markets closed in the red on Thursday. Selling was seen across all sectors.

The 30-share BSE benchmark Sensex declined 284 points or 0.45% to settle at 63,239. The broader NSE Nifty dropped 85 points or 0.45% to end at 18,771 as investors turned cautious with benchmark indexes at near record levels. Expectations of prolonged hawkishness from global central banks also weighed on sentiment.

Among the Sensex stocks, Bajaj Finance and Asian Paints were the top laggards, falling nearly 2%. Tata Motors, Power Grid, NTPC, Infosys, Nestle, UltraTech Cement, and Indus Ind Bank also closed in the red.


On the other hand, L&T, Tata Steel, HDFC, Bharti Airtel, HDFC Bank, M&M and Titan closed with gains.

Sector-wise, Nifty PSU Bank declined 1.67% and Nifty IT fell 0.74%. Nifty Financial Services and Nifty FMCG also closed lower. In the broader market, Nifty Midcap100 declined 1.06%, and Smallcap100 dropped 0.76%.

Meanwhile, the market capitalisation of all listed companies on BSE decreased by Rs 2.05 lakh crore to Rs 292.31 lakh crore. The market breadth was skewed in favour of bears. About 2,203 stocks declined, 1,319 gained, and 133 remained unchanged on the BSE.

Expert Views
"The domestic market is currently witnessing increased volatility as it hovers around its historical peaks. This heightened volatility has also affected mid- and small-cap stocks, which have shown resilience," said Vinod Nair, Head of Research at Geojit Financial Services.

"Moreover, the weak global indicators have had an impact on the domestic market, as they experienced declines following concerns of potential rate hikes, prompted by comments from the Fed chair regarding the fight against inflation," Nair added.

Global Markets
Global shares eased on Thursday after Federal Reserve Chair Jerome Powell indicated US rates had further room to rise, while the dollar held steady against the pound ahead of the Bank of England’s decision on monetary policy later on.

Japan's benchmark Nikkei 225 fell 0.9% to finish at 33,265. Australia's S&P/ASX 200 declined 1.6%. South Korea's Kospi gained 0.4% to 2,593.70. Trading was closed in Hong Kong and Shanghai for Dragon Boat Festival, a national holiday. US stock futures fell 0.2-0.3%, indicating a weaker start on Wall Street later.

Oil prices decline
Oil futures dipped slightly on Thursday, with trader expectations of further interest rate hikes countered by potentially bullish US oil inventory data after preliminary figures showed a fall in stocks. Brent futures eased by 47 cents, or 0.6%, to $76.65 a barrel, and US West Texas Intermediate (WTI) crude futures were down 44 cents, or 0.6%, at $72.09.

Rupee strengthens
The Indian rupee ended stronger on Thursday as the dollar index plumbed to multi-week lows, while an uptick in forward premiums aided the spot rupee. The rupee closed at 81.95 to the dollar against a close of 82.0375 on Wednesday.

(With inputs from agencies)