Sensex drops 554 pts on weak global cues, Nifty ends 1.07% lower; Maruti, RIL, HCL Tech drag

Indian benchmark indices closed lower in volatile trade on Tuesday, following weak cues from the global equity markets. The market sentiments were dented by a jump in U.S. bond yields, which reignited fear of interest rate hikes by the U.S. Federal Reserve by March 2022. The surge in crude oil price and sustained selling by foreign portfolio investors (FPIs) also injected volatility in the market.

The BSE Sensex ended 554 points, or 0.9%, lower at 60,754, while the NSE Nifty dropped 195 points, or 1.07%, to settle at 18,113. Earlier today, Sensex opened higher, following positive cues from Asian peers, but soon pared gains to slip into negative terrain.

The broader markets witnessed sharp sell-off, with the S&P BSE Midcap index falling 2.2%, and the S&P BSE Smallcap index dropping 1.92%.

The overall market breadth on the BSE was negative, with 2,420 shares declining out of total 3,809 traded stocks. Out of the total shares, 1,272 shares advanced and 117 were unchanged.

On the sectoral front, all indices, barring bank, ended in the negative terrain with realty and auto sectors declining the most. The BSE realty index fell 2.62%, led by Sunteck Realty, DLF, Godrej Industries, Oberoi Realty, and Phoenix Mills. The realty sector was followed by the auto index, which closed 2.29% lower. The top losers in auto sector include Maruti Suzuki India, Eicher Motors, Bosch, Motherson Sumi Systems, and Ashok Leyland.

Top gainers and losers

Maruti Suzuki India, the country’s largest car maker, topped the losers’ chart by falling 4.05%. Some of the other notable losers include UltraTech Cement, Tech Mahindra, HCL Technologies, and Tata Steel, which dropped in the range of 2.9%-3.8%.

On the gaining side, private sector lender Axis Bank emerged as the biggest gainer by rising 1.83%. The other top performers were HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Dr. Reddy's Laboratories, which climbed up to 0.5%.

Shares in news

Reliance Industries: Shares of Mukesh Ambani-led firm closed 1.15% lower today. The company’s retail arm, Reliance Retail Ventures has acquired a 54% stake in domestic robotics company Addverb for $132 million (or about ₹983 crore).

Jubilant Ingrevia: Shares of the chemical company ended 3.3% after ace investor Rakesh Jhunjhunwala trimmed his stake in the company. Jhunjhunwala sold 1.3 million shares, or 0.81% stake, in the company, according to the December quarter shareholding pattern filing on the BSE. This was the second consecutive quarter when the ace investor cut his stake in the firm. In the September quarter, he had offloaded 1.21 million shares.

Inox Wind: Shares of wind energy service provider dropped 1.5% after its board approved a proposal to participate in offer for sale (OFS) worth ₹400 crore of its green energy arm, Inox Green Energy Services. The offer will be subject to market conditions, receipt of applicable approvals and other considerations, the company said in an exchange filing.

Tech Mahindra: Shares of IT major fell 3.5% a day after the company announced a slew of acquisitions. The company, through its wholly owned subsidiary, Tech Mahindra London approved the proposal to acquire 100% stake in Com Tec Co IT and 25% equity shares each in SWFT Technologies and Surance.

Adani Green Energy: Shares of energy company jumped around 5% intraday to a 52-week high of ₹1,923.90 a piece. With this, it became the first company in Adani Group to achieve Rs 3 trillion market cap milestone. Paring some of early gains, the stock ended 4.45% higher.

Tata Motors: Shares of auto major slipped 2.7% after the company announced that it will hike prices of its passenger vehicles by an average of 0.9% with effect from January 19, owing to rise in input costs.

Nazara Technologies: Gaming and sports media firm dropped 2.5% after the company said it will acquire a 55% stake in programmatic advertising and monetisation company Datawrkz for about ₹124 crore.

Asian markets fall as BOJ raises inflation outlook

Shares in the Asia-Pacific region ended mostly lower on Tuesday, reversing early gains, as spurt in U.S. bond yields left investors jittery. Adding to it, the looming fears that the Federal Reserve would soon raise interest rates also weighed on investor sentiment.

Japan’s Nikkei 225 index settled 0.27% lower after the Bank of Japan upgraded its inflation outlook on Tuesday, flagging concerns that commodity-driven price exacerbated by a weak yen. The central bank, however, decided to maintain its ultra-loose monetary policy even as its global counterparts moved to taper economic stimulus.

The Hang Seng index in Hong Kong shed 0.43%, the Straits Times Index in Singapore slipped 0.24%, and Taiwan Weighted Index tumbled 0.78%. Australia’s ASX 200 index also settled 0.11% lower.

In mainland China, Shanghai Composite and Shenzhen Component rose 0.8% and 0.2%, respectively, as investors cheered the economic recovery from the pandemic. A data released by the National Bureau of Statistics on Monday showed that China’s economy grew 4% in the December quarter from a year earlier, in line with market expectations. As per the data, gross domestic product (GDP) grew faster than expected at 8.1% in 2021.

Tech stocks drag European shares

Most of the European stocks opened lower today as tech stocks tumbled amid rise in U.S. bond yields. The pan-European STOXX 600 index fell 0.9%, led by technology shares which dropped 1.5% in early deals.

Germany’s DAX plunged 1.25% in early trade, while France’s CAC index fell 1.08%. In a similar trend, the U.K.’s FTSE 100 index slipped 0.8%, while Spain’s IBEX index and Italy’s FTSE MIB index declined 0.61% and 0.87%, respectively, in early deals.