Sensex plunges nearly 483 points on sell-off in IT, banking stocks

Mumbai, April 11

Benchmark BSE Sensex tumbled by nearly 483 points on Monday due to selling in IT, capital goods and banking shares following losses in global equities on worries over high-interest rates.

The 30-share index tanked 482.61 points or 0.81 per cent to close at 58,964.57 with 23 of its constituents closing in the red. During the day, it tumbled 552.78 points or 0.92 per cent to 58,894.40.

The 50-issue Nifty of the National Stock Exchange declined by 109.40 points or 0.62 per cent to finish at 17,674.95 as 29 of its stocks declined.

“Negative sentiment across Asian equities had a bearing on local stocks, as investors followed suit and trimmed their positions in risky counters,” Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said.

HCL Tech fell the most by 2.73 per cent while the other two IT majors Infosys and Wipro also declined by 2.67 per cent and 2.16 per cent, respectively.

“Investors, especially, shunned technology stocks ahead of TCS results because of fears that any subdued outlook for the next quarter earnings could ignite further selling in the sector going ahead,” Chouhan said.

TCS, ahead of its quarterly financial results scheduled for release after market hours on Monday, bucked the trend to close higher by 0.26 per cent.

Among major Sensex losers, Larsen & Toubro declined by 2.72 per cent, Asian Paint by 1.54 per cent, HDFC by 1.39 per cent, HDFC Bank by 1.25 per cent, Axis Bank and Dr Reddy’s by 1.2 per cent each.

Reliance Industries, HUL, Titan, Tata Steel, Bajaj Finserve, Power Grid and Airtel also dropped.

“The market is wary ahead of the ECB meeting, the release of US inflation data, and the start of the domestic Q4 result season. Indian IT sector dragged due to weak result expectations on a QoQ basis. In this shortened week, the market is cautious as trading at the upper side of the trend and momentum has shifted from broad to stock-specific,” Vinod Nair, Head of Research at Geojit Financial Services, said.

Global stock markets were down due to concerns over inflation, expectations of aggressive rate hikes by the US Federal Reserve and weak growth due to the geopolitical situation.

The US Fed officials have indicated that they are considering raising the benchmark rate by double the normal amount at upcoming meetings. They also indicated they may shrink the Fed’s bond holdings, which might push up commercial borrowing rates.

ICICI Bank, on the other hand, rose the most by 0.71 per cent. NTPC, UltraTech Cement, Nestle, Maruti  Suzuki and Sun Pharma advanced.

In the broader market, the BSE midcap gauge gained 0.41 per cent, while the smallcap index went up by 0.38 per cent.

“Markets started the week on a feeble note following weak global cues and lost over half a per cent. After a muted opening, the benchmark continued to trade in a range however the bias was on the negative side.

“Amid all, sectoral indices traded mixed wherein selling pressure in IT heavyweights and select index majors from the banking and financials space dented sentiment,” Ajit Mishra, VP – Research, Religare Broking Ltd, said.

Among BSE sectoral indices, IT declined the most by 1.46 per cent, followed by teck (1.37 per cent), capital goods (1.09 per cent) and telecom (0.60 per cent).

In contrast, power gained the most by 5.18 per cent, followed by utilities (5.09 per cent) and oil and gas (2.38 per cent).

Stock markets in Hong Kong, Seoul, Shanghai, and Tokyo ended lower. European stock markets were also trading lower due to a sell-off in technology stocks. Stocks in the US ended mostly lower on Friday.

International oil benchmark Brent crude declined 2.38 per cent to USD 100.3 per barrel.

Foreign institutional investors continued to offload shares worth Rs 575.04 crore on Friday, according to exchange data.