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    Sensex crashes 774 points; investors' wealth erodes by Rs 3.66 lakh crore

    Synopsis

    “Indian equities witnessed significant sell-off as the market appeared apprehensive ahead of the upcoming Union Budget and Fed meeting next week. Sentiments were dampened by persistent FII selling, where funds are being shifted to other EMs as a result of attractive valuations," said Vinod Nair, Head of Research at Geojit Financial Services

    Sensex plunges over 700 pts, Nifty below 17,900; Bank Nifty down over 2%
    Bringing the curtain down on a heightened volatile trading due to the expiry of weekly and monthly derivative contracts, Indian equity indices ended in the red on Wednesday with the BSE Sensex ending 774 points or 1.27% lower at 60,205, and Nifty 50 closing 226 points or 1.25% lower at 17,891. Selling was seen across all sectors.

    Meanwhile, the market capitalisation of all listed companies on BSE declined by Rs 3.66 trillion to Rs 276.73 trillion.

    Among Sensex stocks, SBI and IndusInd Bank were the top losers, falling over 4%. HDFC Bank, Axis Bank, HDFC, Tech Mahindra, UltraTech Cement and ICICI Bank also ended with cuts. However, HUL, Maruti, Tata Steel, NTPC and Sun Pharma managed to end with gains.

    Sector-wise, Nifty PSU Bank fell 3.58% and Nifty Financial Services declined 2.54%. Nifty Oil & Gas and Nifty Realty also fell nearly 2%. Whereas, in the broader market, Nifty Midcap50 declined 1.48% and Smallcap50 fell 1.16%.

    “The 18,200 Nifty has become a major resistance level which is keeping the Nifty in the narrow band of 17,800-18,200. Now, it appears that a major trigger is necessary to break this range either on the upside or the downside,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

    “Indian equities witnessed significant sell-off as the market appeared apprehensive ahead of the upcoming Union Budget and Fed meeting next week. Sentiments were dampened by persistent FII selling, where funds are being shifted to other EMs as a result of attractive valuations. Furthermore, a weak economic growth outlook that stoked recession fears pulled down global markets," said Vinod Nair, Head of Research at Geojit Financial Services.

    Here are the five key factors behind the bloodbath on Dalal Street today:

    • FII selling
    Foreign institutional investors who have been on a selling spree on Dalal Street were net sellers to the tune of Rs 760.51 crore yesterday. The total outflow so far in the month has crossed the Rs 17,000 crore mark as FIIs are said to be favouring relatively cheaper markets like that of China.

    • Selloff in Adani stocks
    Adani Ports and Adani Enterprises were among the top losers in Nifty pack. The slide comes after short-seller Hindenburg Research said it holds short positions in the Adani Group companies through U.S.-traded bonds and non-Indian-traded derivative instruments, and flagged risks to the financials of key companies.

    All 10 Adani Group stocks ended in the red with Ambuja Cement dropping the most at 7.7% to Rs 460. Other top losers in the pack included Adani Ports, which fell 6.3%, while Adani Power and Adani Wilmar hit a 5% lower circuit.

    • F&O expiry
    A part of the volatility today can also be attributed to the weekly and monthly derivative expiry today. F&O contracts expire on Thursday but tomorrow being a market holiday on account of Republic Day celebrations, the expiry day has been preponed today.

    Nifty has been consolidating in between 17,777 to 18,250 zones from the last 18 trading sessions where declines are being bought but absence of follow up buying is clearly viable in the market, said Chandan Taparia of Motilal Oswal.

    • Weak global market cues
    US and European stock futures fell Wednesday while Asian stocks eked out small gains amid downbeat investor sentiment following mixed corporate earnings.

    Contracts for the Nasdaq 100 fell 0.7% after a slight decline in the underlying index on Tuesday, with a slowing sales outlook for Microsoft Corp.’s cloud-computing business setting the tone as Asian trading got underway. Futures for the S&P 500 and Euro Stoxx 50 benchmarks also dropped.

    Wall Street stocks were mixed at the end of a choppy session Tuesday as investors digested an uneven set of results from US corporate giants including Verizon and 3M. The Dow Jones Industrial Average finished up 0.3% at 33,734. The broad-based S&P 500 slipped 0.1% to 4,017, while the tech-rich Nasdaq Composite Index dropped 0.3% to 11,334.

    • Pre-Budget nervousness and Fed fear
    Traders were cautious ahead of two big events in the coming week - Union Budget and Fed meeting outcome. Both events are coinciding on February 1, ahead of which Nifty has been trading in a narrow band of 17800-18200. A good budget and positive commentary from the Fed can break the upper band.

    "Any negative budget proposal like raising the rate of long-term capital gains tax or a worse-than-expected hawkish Fed can break the lower end of the range," said Dr. V K Vijayakumar.

    • Crude prices rise
    Oil slipped on Wednesday, adding to a decline in the previous session, as a rise in U.S. crude inventories and global recession worries edged out optimism for a demand recovery in China. Brent crude futures fell 0.07%, to $86.09 per barrel. US West Texas Intermediate (WTI) crude futures dropped 0.02%, to $80.11 per barrel.

    (With inputs from agencies)



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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