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Sensex Falls for 6th Straight Session, Ends 509 pts Lower, Nifty Tests 16,850; ITC Sheds 3%

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Sensex Today: Indian shares fell on Wednesday, dragged by banks and metal companies, as risk sentiment weakened over worries of a global recession. The S&P BSE Sensex fell 509 points to close at 56,598, while the Nifty50 ended 149 points lower at 16,859. Both the frontline indices fell 0.89 per cent each.

Axis Bank, ITC, Reliance Industries, HDFC twins, Bajaj Finserv, IndusInd Bank, Tata Steel, and SBI were the top large-cap losers, while Sun Pharma, Power Grid, Asian Paints, Dr Reddy’s Labs, M&M, and Tech M climbed on the bourses.

In the broader markets, the BSE MidCap, and SmallCap indices lost 0.4 per cent each. Among sectors, the Nifty Metal, and PSU Bank indices dipped 2 per cent each, while the Nifty Pharma index gained 0.6 per cent.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said: “Globally equity markets are in bear territory. Nasdaq is down 33.2 per cent from the peak and S&P 500 is down 24.3 per cent from the peak. The Euro Stoxx 50 is down 24.3% from its peak. These are clear bearish signals from markets in the developed world. India is a distinct outlier with only 8.5 per cent decline from the peak in Nifty. India can remain an outperformer supported by its strong fundamentals but India cannot remain immune to major global trends.”

“The texture of the market has changed from ‘buy on dips’ to ‘sell on rally’ and therefore, investors have to be cautious in the market now. The Bank Nifty has sharply corrected by 8 per cent from its recent record high and is weak now. IT is likely to remain resilient supported by currency tailwinds. Autos and capital goods can be slowly accumulated on declines. Since valuations in India continue to be high relative to peers, investors may brace for more corrections in this bearish scenario. A sharp turnaround in global market sentiments will happen only when data indicate a decline in US inflation.”

Rupee

The Indian rupee opened at a record low at 81.83 per dollar on Wednesday against the previous close of 81.57.

Global Cues

Asian share markets slid on Wednesday as surging borrowing costs fed fears of a global recession, spooking investors into the arms of the safe-haven dollar and driving the Chinese yuan to record lows.

Tokyo stocks opened lower on Wednesday after Wall Street ended mixed, with the S&P 500 notching a new low for the year. The benchmark Nikkei 225 index was down 0.98 percent, or 261.70 points, at 26,310.17 in morning trade, while the broader Topix index was down 0.78 percent, or 14.65 points, at 1,858.36.

The S&P 500 fell to its lowest level in almost two years on Tuesday on worries about super aggressive Federal Reserve policy tightening, trading under its June trough and leaving investors appraising how much further stocks would have to fall before stabilizing.

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