Indian equities staged a late revival to recoup part of the losses incurred in early trade, on a day when financials and tech stocks dragged the indices down after UBS stepped in to acquire embattled rival Credit Suisse.
Tracking Asian equities, the Sensex opened at 57,773.55, more than 200 points down from Friday’s close, and touched an intra-day low of 57,084.91 — a 905-point or 1.6% slide from its previous close — before settling down to close 361 points or 0.6% down at 57,628.95.
Investor wealth declined by `2.09 trillion to `255.43 trillion during the session.
While UBS’ move may have come as a relief, it did little to calm sentiment, with Asian indices trading in the red on the day. The Nikkei, Hang Seng, ASX200, KOSPI, and Shanghai Composite all closed in the red.
Europe’s Stoxx 50, too, opened in the red, shedding up to 2% before recovering losses to trade in green territory in afternoon trade.
The biggest sectoral loser in the BSE universe was metals, down over 2.17%, with commodities and infotech also shedding close to 1.3%. The midcap and smallcap indices also shed close to 1% each.
The Bajaj twins led the losses, with Bajaj Finserv down over 4% and Bajaj Finance shedding over 3%, with two Tata group firms, Tata Steel and Tata Motors, also among the top losers. Market breath was negative, with 1,072 stocks advancing against 2,571 declining.
The broader Nifty closed below the 17,000-mark again at 16,988.40, down 111.65 points or 0.65%.
Adani Enterprises shed close to 5%, while Hindalco and Bajaj Finance were others to lose over 3%.
The Bank Nifty closed at 39,361.95, down 236.15 points or 0.6%. Only Federal Bank, Kotak Bank and ICICI Bank ended the session with gains, while Bandhan Bank and AU Bank lost over 2% each.
“Indian indices have been following global trends since the last two months, owing to the heavy FII selling and the inflation narrative, with further interest rate hikes likely. Given that FIIs have maximum exposure to banks and IT firms, these are the counters bearing the maximum brunt of the sell-off,” said Devang Mehta, head (Equity Advisory), Centrum Broking.
He pointed out that while UBS rescuing Credit Suisse may have come as a boost to the industry, it didn’t prove enough for the markets, and Indian equities felt the pressure as it cannot be insulated completely from the weak global sentiment. He said fundamentally, the financial sector is in prime health, and this was a sentiment-driven and liquidity-driven sell-off.
DIIs remained net buyers on the day with `2,876.64 crore, while FIIs pulled out `2,545.87 crore.