The benchmark equity indices ended Monday’s trading session in the negative territory. The NSE Nifty 50 dropped 166.45 points or 0.76% to settle at 21,616.05, while the BSE Sensex plunged 523 points or 0.73% to 71,072.49, whereas the Bank Nifty index ended lower by 752.30 points or 1.65% to settle at 44,882.25.
The broader indices ended in negative territory, with falls led by Small-cap and Mid-cap stocks. IT and Pharma stocks gained among the other sectoral indices while PSU Banks and Media stocks shed over 5%.
Dr Reddy’s Lab, Apollo Hospitals, Divis Labs, Wipro, and HCL Technologies were the top gainers on the NSE Nifty 50, while the laggards includes Coal India, Here MotoCorp, BPCL, ONGC, and Tata Steel.
The Indian Volatility Index (India VIX) closed up by 3.98 %.
“An uptick in exchange margin requirements caused a decrease in positions, primarily in mid and small caps. Aside from the pharma and IT sectors, selling was widespread, with notable struggles seen in PSU banks. The premium valuation gap between mid to large caps has notched to its all-time high,” said Vinod Nair, Head of Research at Geojit Financial Services.
Nair also said that, Despite a robust economic forecast, corporate earnings are expected to slow due to moderated operating margins. It is going to be a challenge for the broad market to sustain the premium valuation. Large caps are predicted to excel amid consolidation.