Sensex, Nifty post biggest single-day drop in 3 weeks; these factors dampened investor sentiment today

Sensex plunged 709 points or 2.07 per cent to end at 33,538, while the Nifty 50 dropped 214 points or 2.12 per cent to settle just above 9,900-mark

As bears took over the markets, headline indices BSE Sensex and Nifty 50 ended over two per cent lower in Thursday’s session on global sell-off post US Federal Reserve’s policy meeting outcome. The 30-share Sensex plunged 709 points or 2.07 per cent to end at 33,538, while the broader Nifty 50 index dropped 214 points or 2.12 per cent to settle just above 9,900-mark. Reliance Industries (RIL), HDFC Bank, ICICI Bank, Infosys and TCS contributed the most to the indices’ losses. “Indian equity markets posted their biggest single-day drop in three weeks. Weak global cues, adverse comments by SC in AGR case and widespread profit-taking on weekly F&O expiry day pulled indices lower,” said Deepak Jasani, Head Retail Research, HDFC Securities.

SBI shares tank over 5.5%: State Bank of India (SBI) was the top Sensex loser, down 5.64 per cent, followed by Sun Pharmaceuticals, Maruti Suzuki, Bajaj Finance, ICICI Bank, Tata Steel and Axis Bank. On the contrary, just 5 stocks, namely, IndusInd Bank, Hero MotoCorp, Power Grid, M&M and Nestle India were the top Sensex gainers.

Nifty PSU Bank index plunges nearly 4%: Nifty PSU Bank index plunged 3.76 per cent dragged by SBI, Punjab & Sind Bank, Indian Overseas Bank and Bank of Baroda. Nifty Metal index, too, settled 2.78 per cent lower weighed by weakness in Welspun Corp, SAIL, National Aluminium Company and Vedanta.

Broader market: The broader market, mid-caps and small-caps, performed in line with the benchmarks, as their sectoral indices on BSE closed 1.41 per cent and 1.04 per cent lower.

India VIX gains 1%: Volatility index India VIX gained nearly one per cent to close at 29.43. The volatility index is calculated on the basis of the order book of Nifty options. It helps traders to gauge the movement of the equity market for the next 30 days.

SC’s AGR observation: Supreme Court granted telcos including Bharti Airtel and Vodafone Idea a week to file an affidavit on how they plan to pay the dues and questioned the government’s 20-year staggered payment plan. Vodafone Idea share price tumbled 13 per cent to close at Rs 9.39 apiece on BSE. “During the afternoon session the markets failed to show pullback and further declined after Supreme Court’s observation on telecom sector AGR dues which has likely gone negative with the markets,” Narendra Solanki, Head Fundamental Research, Anand Rathi Shares and Stock Brokers, said.

Market outlook for Friday: “The positioning of the global markets will continue to dictate the market trend ahead also. Nifty should hold 9850 for any rebound else profit taking would continue. We suggest limiting the leveraged trades and keeping the existing positions hedged,” said Ajit Mishra, VP – Research, Religare Broking Ltd