Domestic equity markets continued their decline for the second consecutive session and settled lower on Wednesday. The monetary policy outcome by the US Federal Reserve kept traders on edge as they anticipated the possibility of higher interest rates being maintained for an extended period. Weakness in the metal, IT, and auto sectors weighed on the market during the day.
For the day, the BSE Sensex declined by 283.60 points, or 0.44 percent, to close at 63,591.33. The NSE’s Nifty fell 90.45 points, or 0.47 percent, to conclude the session at 18,989.15. Nonetheless, the broader markets mirrored the main indices, with the BSE midcap and smallcap indices also closing in negative territory. The India VIX, an indicator of market volatility, rose by approximately 2 percent to reach 12.05 levels.
Investors exercised caution and reduced their equity exposure as markets extended their decline for the second consecutive session due to selling in metal, power, auto, and banking stocks. Meanwhile, gains in telecom stocks helped offset overall losses. The continued offloading of shares by foreign institutional investors (FIIs) in the domestic market continued to impact sentiment, according to Prashanth Tapse, Senior VP (Research) at Mehta Equities.
“Investor sentiment was also primarily clouded by lingering concerns about corporate India’s Q2 earnings, which, as of now, are uninspiring. From a technical perspective, an upside in the Nifty may only be observed above the significant hurdle at the 19,289 mark, while support is found at the 18,823 mark,” he observed.
In terms of sectors, the Nifty realty index gained about two percent, while the media index increased by roughly one percent. The PSU bank, pharma, and healthcare indices finished in positive territory. In contrast, the Nifty metal index declined by over one percent, and the IT and auto indices decreased by half a percent to one percent for the day.
Within the Nifty50 index, Adani Entertainment fell by more than 3 percent, while Coal India, Tata Steel, SBI Life Insurance Company, and Adani Ports each fell by over 2 percent. Other major decliners included Asian Paints, Maruti Suzuki, Tata Consultancy Services, and JSW Steel.
On the other hand, Sun Pharmaceutical Industries gained about 3 percent following a strong Q2 performance. Bharat Petroleum rose by over 2 percent for the day. HDFC Life Insurance Company and Hindalco Industries each added about one percent. Tata Consumer Products and ITC were among the other prominent gainers.
The domestic indices were influenced by global signals ahead of the Fed’s monetary policy decision later in the day, with the global market also digesting mixed US corporate earnings reports, according to Vinod Nair, Head of Research at Geojit Financial Services.
The markets anticipate the Fed to maintain the status quo in its policy, but the concern is about the sustainability of high interest rates for an extended period. Weakening demand, as indicated by October’s PMI data, led to greater caution in India. Nevertheless, good H1 gross tax collection and monthly volume demand in line with expectations from the auto sector resulted in only a minor negative impact,” he stated.
On Wednesday, a total of 3,783 shares were traded on the BSE, with 2,003 ending in the red. Meanwhile, 1,641 stocks closed the session with gains, and 139 shares remained unchanged. During the day, 220 shares hit their upper circuit, while 185 shares tested the lower circuit levels. In the broader markets, Thangamayil Jewellery hit a lower circuit of 10 percent, and Savita Oil Technologies dropped by 9 percent. Jindal Steel & Power closed 8 percent lower, while Natco Pharma, Electronics Mart India, and CARE Ratings each shed 7 percent. DCM Shriram and Shiva Cement ended 6 percent lower. Among the gainers, Jubilant Industries increased by around 13 percent, while Greenlam Industries and GFL surged by 11 percent each. SEPC and Cressanda Solutions rose by 10 percent each. Blue Star was up 8 percent, while Vodafone Idea, Apollo Micro Systems, and Geojit Financial Services closed 7 percent higher.