By Siddhant Mishra The benchmark indices slipped back into red territory after a policy change by the Bank of Japan stumped investors and a Covid surge in China added to concerns.
The Sensex dropped 103.90 points to end at 61,702.29, while the Nifty50 edged down 35.15 points, or 0.19%, to close at 18,385.30. The Sensex had declined over 400 points in intra-day trade before clawing back to end with a loss of 0.17%.
Early on Tuesday, the Bank of Japan modified its Yield-Curve Control (YCC) band from 25 bps to 50 bps, thus implying an effective rate of +0.5% for all purchases of the 10-year government bonds.
Although the BoJ cited the need to improve market functionality, the recent trend rise in inflation was indeed the main factor behind the rise in market expectations for higher rates. Today’s surprise move by the BoJ has caused higher volatility in other countries’ bond markets. The BoJ may create higher volatility in overseas financial and capital markets and the take of BoJ policymakers would be important to keep an eye on, said Madhavi Arora, Lead Economist, Emkay Global Financial Services.
TCS led with a 1.3% gain among the Sensex pack, with index heavyweight Reliance Industries up 0.81%. Besides TCS, all tech stocks saw a decline.
IndusInd Bank and ICICI Bank gained on the day, though SBI, Kotak Bank and the HDFC twins ended in the red. Axis Bank, however, scaled its 52-week high of 952.90, before closing with a gain of 0.4% at 950.05.
Most sectoral indices closed in the red, except oil & gas, energy, and information technology.
A total of 1,597 stocks advanced on the BSE, with 1,940 stocks declining.
Adani Enterprises was the leader in the broader Nifty pack, up 2.2%, with TCS and RIL coming next, up 1.25% and 0.79%. However, SBI Life was the biggest loser, falling 3%, as auto stocks also declined.
The Bank Nifty also edged down 0.12%, while the realty index slid 1.2%. However, the metal and oil & gas indices ended in the green.
While DIIs continued being net buyers, pumping in `494.74 crore, FIIs also turned net buyers, infusing `455.94 crore.