Among sectors, except oil & gas all other indices ended lower with IT, power, realty and FMCG indices down 2 percent each. BSE midcap and smallcap indices lost a percent each.
Indian equity benchmarks on Tuesday extended their fall for the fifth straight session, dragged by heavy selling pressure in information technology (IT), financial and consumer goods stocks. The domestic indices fluctuated between gains and losses throughout the day before plunging sharply in late deals.
Weaker quarterly corporate earnings, ongoing Russia-Ukraine spat, and high inflation worries dented investor sentiment.
The 30-share BSE Sensex slumped 704 points or 1.23 per cent to close at 56,463, while the broader NSE Nifty moved 215 points or 1.25 per cent lower to settle at 16,959.
Mid- and small-cap shares finished on a weak note as Nifty Midcap 100 index fell 1.37 per cent and the small-cap shed 1.66 per cent.
14 out of the 15 sector gauges — compiled by the National Stock Exchange — ended in the red. Nifty IT, Nifty FMCG and Nifty Financial Services underperformed the index by falling as much as 2.98 per cent, 2.82 and 2.03 per cent, respectively.
“We witnessed mayhem in markets in last 30 minutes. Investors are advised to remain invested in quality stocks in coming days and avoid weak fundamental stocks. They should remain cautious and keep adequate liquidity to keep adding quality stocks at every dip,” said Rahul Sharma, Research Head, Equity 99.
On the stock-specific front, HDFC was the top Nifty loser as the stock cracked 6.26 per cent to Rs 2,121.75. HDFC Life, SBI Life, HDFC Bank and Tata Consumer Products were also among the laggards.
The overall market breadth stood negative as 1,164 shares advanced while 2,248 declined on BSE.
On the 30-share BSE index, HDFC twins (HDFC and HDFC Bank), Infosys, ITC, Tech Mahindra, HCL Tech, Hindustan Unilever, Kotak Mahindra Bank, Maruti and Nestle India were among the top losers.
In contrast, Reliance Industries, ICICI Bank, SBI and Bajaj Finance settled in the green.
Shares of HDFC Bank on Tuesday continued their downward trend for the ninth straight session.
Shares of HDFC Bank on Tuesday continued their downward trend for the ninth straight session. Earlier this month, mortgage lender Housing Development Finance Corporation (HDFC) announced that it will merge with the private bank.
In response, HDFC and HDFC Bank referred to as HDFC twins, had witnessed a sharp rally on April 4. However, both the stocks have been declining after that.
HDFC Bank fell as much as 3.73 per cent to settle at Rs 1,343.30 today on the BSE index. On the NSE platform, the stock plunged 4.33 per cent to close at Rs 1,335.
Manoj Dalmia, Founder and Director – Proficient Equities Ltd, said: “Shares of HDFC Bank, which fell for the ninth consecutive trading session today, are unlikely to see any short-term recovery after a miss on quarterly earnings. The stock has corrected by about 20 per cent in the last 9-10 days despite the merger news. Price targets have been slashed for this stock.”
Mr Dalmia added, “Investors are advised to buy on dips. The stock is under temporary selling pressure due to the result declaration, it might soon recover as we expect this stock to regain its momentum and reach Rs 1,650 levels again in the coming months.”
HDFC Bank posted a 23 per cent jump in standalone net profit to Rs 10,055.20 crore for the March quarter. HDFC currently owns 21 per cent of HDFC Bank.
Ravi Singhal, Vice Chairman, GCL Securities Ltd, said, “As we can see from management’s confirmation, the merger will benefit from 2024 to 2025, a long period, which is why profit-booking is coming in stock while the results are weak. As a result, it may show a greater negative impact of 5 per cent.”
Currently, HDFC has total assets of Rs 6.23 lakh crore, while HDFC Bank has assets worth Rs 19.38 lakh crore. HDFC Bank has a large customer base of 6.8 crore.
Ravi Singh, Vice-President and Head of Research, ShareIndia, said, “The overall sentiment in the market is negative, especially the banking sector which is in correction mode. HDFC Bank may also further correct up to Rs 1,300 – Rs 1,280 levels.
Mr Singh further said, “Long-term investors need not to worry about the current volatility. In the next quarter also, the banking sector may witness some more weaknesses in the earnings growth. The soaring inflation is also pushing RBI to take steps for fiscal tightening, which will further affect the sector.”
Meanwhile, HDFC cracked as much as 5.50 per cent to close at Rs 2,138.65 today on the BSE. On NSE, the stock plunged 6.26 per cent to end at Rs 2,121.75