The equity barometers witnessed intense sell off during early afternoon trade. The Nifty breached the 14,800 mark as it hit a fresh intraday low. Banks, financials and auto stocks tumbled. Rising domestic inflation and increase in COVID-19 cases sapped investors appetite for risk assets.
At 12:20 IST, the barometer index, the S&P BSE Sensex, tumbled 932.23 points or 1.84% at 49,859.85. The Nifty 50 index slumped 251.15 points or 1.67% at 14,779.80.
In the broader market, the S&P BSE Mid-Cap index declined 1.77% while the S&P BSE Small-Cap index lost 1.06%.
The market breadth was weak. On the BSE, 954 shares rose and 1,886 shares fell. A total of 165 shares were unchanged.
Economy:
India's wholesale price-based inflation (WPI) in February rose to 4.17% as against 2.03% a month ago in January and 2.26% during the corresponding month of the previous year. Wholesale prices in February this year, which were highest in the last 27 months, rose on the back of rising food prices and manufactured goods.
India's retail inflation (CPI) inched up to 5.03% in February, mainly due to rise in food and fuel prices. Food inflation rose to 3.87% in February, compared to 1.89% in the previous month. Inflation in 'fuel and light' category fell marginally to 3.53% in February compared to 3.87% in January but remained high compared to the corresponding period of the previous year.
The consumer price index (CPI) based retail inflation was at 4.06% in January which was lowest since October 2019.
Meanwhile, the country's factory output (IIP) for the month of January contracted by 1.6% after registering a 1% growth in December 2020. Electricity sector output grew 5.5% in January, while manufacturing contracted by 2% and mining output contracted by 3.7%.
Hit by COVID-19 spread and lockdowns, IIP contracted for five months in row from April to August in last fiscal before making a comeback to positive territory.
Further, Bank credit has risen by 6.63% to Rs 107.75 lakh crore and deposits grew by 12.06% to Rs 149.34 lakh crore in the fortnight ended 26 February, according to RBI data. In the fortnight ended 28 February last year, bank credit stood at Rs 101.05 lakh crore and deposits at Rs 133.26 lakh crore.
Bank credit increased by 6.58% to Rs 107.04 lakh crore and deposits rose by 11.75% to Rs 147.81 lakh crore in the previous fortnight ended 12 February 2021.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 2.70% to 22.295. The Nifty 25 March 2021 futures were trading at 14,829.95, at a premium of 50.15 points as compared with the spot at 14,779.80.
The Nifty option chain for 25 March 2021 expiry showed maximum Call OI of 28.2 lakh contracts at the 16,000 strike price. Maximum Put OI of 28.6 lakh contracts was seen at 14,000 strike price.
Coronavirus Update:
Total COVID-19 confirmed cases worldwide stood at 11,98,74,650 with 26,53,644 deaths. India reported 2,19,262 active cases of COVID-19 infection and 1,58,725 deaths while 1,10,07,352 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Buzzing Index:
The Nifty Financial Services index fell 2.48% to 16,097.75. The index has fallen 3.54% in two days.
Sriram Transport Finance (down 4.66%), Piramal Enterprises (down 4.05%), ICICI Prudential Life Insurance (down 3.98%), Axis Bank (down 3.83%) and Bajaj Finance (down 3.26%) declined.
Stocks in Spotlight:
Adani Enterprises fell 0.95%. Welspun India jumped 5.93%. Adani Welspun Exploration (AWEL), a joint venture between the Adani Group and Welspun Enterprises, announced its first ever gas discovery in the NELP-VII block MB-OSN-2005/2. AWEL holds 100% participative interest (PI) and is the operator of this block. Spread across 714.6 square km, the block is located in the prolific gas-prone Tapti-Daman sector of Mumbai Offshore basin where production is already underway by another operator/other operators.
Shree Cement slipped 1.72%. The cement manufacturer said it has commenced commercial production at its new cement grinding unit having capacity of 3 MTPA set-up at Athagarh Tehsil in Cuttack District of Odisha.
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