Market wrap: Sensex drops 329 pts amid weak global cues; Nifty below 17,250

Top headlines
 

• Sensex drops 329 pts amid tepid global cues; Nifty ends below 17,250
• Cabinet clears Rs 76,000-cr incentive scheme for semiconductors
• Paytm nears record low, down 13% as anchor investors’ lock-in period ends
• Analysts bullish on NBFCs despite RBI's PCA framework
• HP Adhesives subscribed 3 times so far on Day 1

 
Domestic equities whipsawed in trade on Wednesday as investors awaited the outcome of the US Federal Reserve's policy meeting. Globally, Asian shares were little changed and the European shares were weak in early trade as investors paused to see what the Federal Reserve would do to control inflation, while a leap in prices to a 10-year high in Britain added to pressure on the Bank of England to act on Thursday.
 
Back home, the headline BSE Sensex settled 329 points down at 57,788, while the Nifty50 gave up the 17,250 mark to end 103 points lower at 17,221.
 
In broader markets, the midcap and smallcap indices on the BSE dipped 0.6 per cent and 0.4 per cent, respectively.
 
The sell-off was largely broad-based in the markets today with all sectors except the Nifty Auto ending in the negative territory. The Nifty Realty was the top laggard as it slipped nearly 2 per cent. It was followed by the Nifty PSU Bank and IT indices, down 1.3 per cent and 1 per cent, respectively.
 
Now, coming to some of the buzzing stocks of the day.
 

• The shares of Bajaj Finance dropped another 3 per cent on the BSE today. It has fallen by as much as 8 per cent in the past three days on growth concerns. With today's fall, the stock of the NBFC has corrected 14 per cent from its record high of Rs 8,020, touched on October 10, 2021.

 

• Meanwhile, shares of One97 Communications, the parent company of digital payments major Paytm, slipped 13 per cent to Rs 1,297.70 on the BSE in intra-day trade as the mandatory one-month lock-in period for anchor investors expired today. They ended 7.7 per cent lower at Rs 1,380 apiece.

 
 

• Auto shares, including TVS Motor, Maruti, M&M, and Hero MotoCorp, ended up to 1.4 per cent higher on the NSE today after the Union Cabinet approved a Rs 76,000-crore production-linked incentive (PLI) scheme for semiconductor production.

 

• Lastly, the Reserve Bank of India's diktat to bring non-banking financial companies under its Prompt Corrective Action (PCA) framework will be largely neutral for the sector, said analysts, who believed the companies covered under the ambit were already complying with the norms.

 
However, despite this, shares of the Bajaj twins, M&M Finance, Muthoot Finance, and Shriram Transport Finance slipped between 2 and 3 per cent.
 
A look at the primary markets:
 
HP Adhesives' Rs 126-crore initial public offering sailed through on the very first day and was subscribed 3 times as at 4 PM. The retail portion of the offer has already been subscribed over 16 times.
 
Meanwhile, the public offer of Data Patterns has been subscribed nearly 7 times so far on day 2 of the issue. Besides, the IPO of MedPlus Health has been subscribed over 52 times so far on the final day of the issue. The portion reserved for QIB investors has seen a subscription of over 110 times while that of NIIs has been subscribed 85 times.
 
On Thursday, markets will react to the US Fed's policy decision. While the majority expects that the committee would hold rates citing the possible challenges due to the new Covid variant, commentary on tapering, inflation and growth would be critical. Besides, we have weekly derivatives expiry scheduled, hence investors should expect choppiness to remain high. Participants should wait for some clarity over the direction and limit positions.