NEW DELHI: Equity indices plunged on Monday with the benchmark BSE Sensex falling over 1,000 points, weighed down by losses in financial, FMCG and auto stocks.
The 30-share BSE index fell 1,024 points or 1.75 percent to close at 57,621; while, the broader NSE Nifty settled 303 points or 1.73 percent lower at 17,214.
HDFC Bank, L&T, Bajaj Finance, Bajaj Finserv, and HDFC were the top drags on the Sensex pack falling as much as 3.65 percent.
While Power Grid, NTPC, Tata Steel, SBI, and Ultra Cemco were the only gainers.
Here are the top reasons for today’s fall:
* Financial, private bank stocks weigh
Domestic markets were weighed down by losses in shares of private-sector lenders, automakers, financials and FMCG.
The Nifty Bank index fell over 2 percent while financial services ended 2.46 percent lower. The Private Bank index was down 2.34 percent, while the Nifty FMCG index finished 1.98 percent lower.
The Nifty Auto sub-index tumbled 1.6%, led by a 3.5% drop in two-wheeler maker Hero MotoCorp. Data from a retail industry body showed total vehicle retail sales in January dropped 10.7%.
However, PSU bank was the only sub-index that edged higher, led by a State Bank of India (SBI) which rose after reporting stronger-than-expected profit for the third quarter, while smaller peer Bank of Baroda jumped nearly 10% after its quarterly profit more than doubled.
* IT stocks continue to be under pressure
The sub-index Nifty IT plunged yet again today with Wipro being the top drag at 2.44 percent, followed by Mindtree, L&T Technology Services, and Larsen & Toubro Infotech all falling over 2 percent.
Globally, IT stocks have remained under pressure since the past 8-10 trading sessions. The index has plunged over 7 percent since January so far.
* Weak cues from global markets
In Asian markets, Japan’s benchmark Nikkei 225 lost 0.7 percent to finish at 27,248.87. While South Korea’s Kospi declined 0.2 percent to 2,745.06.
Hong Kong’s Hang Seng was little changed, inching up less than 0.1 percent to 24,579.55, while the Shanghai Composite added 2 percent to 3,429.58.
The euro dipped on Monday after a surge last week that followed the hawkish turn from the European Central Bank, as traders turned to the dollar, betting the jump in US jobs created in January could lead to faster US Federal Reserve rate hikes.
* Concern over rate hike by US Federal Reserve
Fears over sharper than expected rate hike by US Federal Reserve has continued to weigh on investor sentiments globally.
US two-year yields were holding firm after gaining sharply in the wake of the jobs data, and briefly touched a new two-year high of 1.33 percent. Besides, the spike in US 10-year bond yield reflects increasing concerns over high inflation.
Markets have now priced in a one-in-three chance the Fed might hike by a full 50 basis points in March, and reasonable chance rates will reach 1.5 percent by year-end.
* RBI MPC in focus
Investors are also awaiting the outcome of the Reserve Bank’s bi-monthly monetary policy meeting scheduled to begin from February 8.
The 3-day meet was postponed by a day after Maharashtra declared a day of mourning on Monday following the death of legendary singer Lata Mangeshkar.
The MPC has held the key repo rate at record lows since May 2020 and reiterated time and again that it will remain supportive of growth and keep its stance accommodative until economic recovery is firmly entrenched.
(With inputs from agencies)
Source : https://timesofindia.indiatimes.com/business/markets/sensex/sensex-crashes-1024-points-nifty-tests-17200-top-reasons-behind-market-fall/articleshow/89405304.cms