Sensex erases opening gains, tumbles 400 points from day's high

Tracking Asian equity markets, Indian benchmark indices opened on a gap-up note on Tuesday, led by the banking, financial, auto and IT stocks, but soon turned volatile in thin trading session.

The BSE Sensex was trading 75 points or 0.12% lower at 60,491 around 9.45 am. The index had opened over 350 points higher. Nifty50 was at 17,999, down 15 points or 0.08% at the same time.

In the 30-pack index, Tata Motors, NTPC, Power Grid and Tata Steel were the top gainers, rising over 1%. L&T, UltraTech Cement, IndusInd Bank, Bajaj Finance, Titan and SBI also opened with gains. On the other hand, only Sun Pharma opened lower.

“Volatility is likely to be the hallmark in the near term amidst December F&O expiry this Thursday. Technically, Nifty’s major support is seen at the 17,407-17,567 zone with intraday support at 17,871. On the upside, Nifty will now face hurdles at the 18,221 mark, while confirmation of strength only if the index closes above the 18,473 mark,” Prashanth Tapse - Senior VP (Research) at Mehta Equities said.

Sectorally, Nifty PSU Bank rose 1.94% and Nifty Metal advanced 1.61%. Nifty Auto and Nifty Realty also opened higher. In the broader market, Nifty Midcap50 increased by 0.85% and Smallcap50 surged 1.52%.

"The New Year is likely to begin on an optimistic note with Q3 results and budget expectations influencing market moves. Results from the banking and capital goods segment would be good since bank credit growth and capex are the two strong themes in the economy now. Banking majors have the potential to move up further from present levels. In IT investors would be keenly watching the guidance from the management rather than the Q3 results which will be good," said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Equities in Asia climbed on Tuesday amid positive sentiment from China’s rollback of Covid isolation measures and the cooling of a key inflation measure in the US. Japan’s Nikkei 225 rose 1%, South Korea’s Kospi increased 0.52% and China’s Shanghai Composite surged 0.78%.

US markets remained shut on Monday for Christmas.

Brent crude March futures surged 0.54% to $84.94 a barrel, while US West Texas Intermediate (WTI) crude futures increased 0.58% to $80.02 a barrel.

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