Global markets, including India, turned lower on Thursday as persistent inflationary pressures and fears of a faster-than-expected rise in US interest rates weighed on riskier assets.
The frontline S&P BSE Sensex shed 621 points, or 1.03 per cent, to close at 59,602 after it fell over 900 points during the day. The broader Nifty50, meanwhile, shut shop at 17,746, lower by 179 points. It had touched a low of 17,655 earlier in the day.
The sharp losses came after minutes from the Federal Reserve's key December meeting showed that the central bank discussed reducing its balance sheet to aggressively dial back its pandemic-era easy monetary policy.
Auto stocks such as Bajaj Auto, Eicher Motors, and Maruti Suzuki dominated the gainers' list. These were supported by gains in IndusInd Bank, Bharti Airtel, UPL, and Bajaj Finance. All these stocks were up between 1 and 2%
On the downside, JSW Steel, Ultratech Cement, Tech Mahindra, RIL and Adani Ports were the top drags, down in the range of 2-3 per cent.
Sectorally, IT shares felt the heat for a second day and were the major laggards. The Nifty IT index has fallen 4% in the last two days. Today, it recouped some losses and ended 1.6% lower. December quarter results of IT majors are keenly awaited. Wipro, TCS and Infosys will announce their Q3 results next week.
Financial stocks were also the major dampeners that pulled the indices down. The Nifty Bank and Financial index fell 1.7% each in the day with heavyweights HDFC Bank, ICICI Bank falling up to 2% on the BSE. The two indices trimmed losses and closed 0.6% and 0.9% down, respectively. Other significant sectoral losers included Nifty Realty, which closed 1.5% lower.
On the flip side, Sugar and Telecom shares were the outperformers in a subdued market. The shares of sugar companies continued their upward movement, with Balrampur Chini Mills, Dwarikesh Sugar Industries and Triveni Engineering & Industries hitting their new respective highs on strong sector outlook.
Meanwhile, the BSE Telecom index rose up to 2.4% in the day amid gains in Bharti Airtel and Vodafone Idea. Tata Teleservices, MTNL and GTL Infra were the other gainers in the space and closed nearly 5% higher.
Given the strength in the broader market, the overall market breadth favored buyers on the BSE. There were 1,983 advancing stocks on the exchange, as against 1,399 declining stocks.
Further, a rally in small-sized companies saw one out of every six traded stocks locked at the upper circuit on the BSE. Nearly 600 stocks hit their respective upper circuits wherein as many as 63 per cent or 382 stocks were from the BSE X and XT group.
Lastly, as per a report by Nomura Holdings, the Reserve Bank of India is expected to start raising borrowing costs from April as fresh curbs to tackle a resurgent Covid-19 outbreak could disrupt supply chains and drive consumer prices higher. It sees upside risks to its 5.6% full-year inflation forecast due to possible supply disruptions as states increase pandemic curbs.
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