Markets skid for 2nd day as profit-booking takes hold

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Mumbai: The Sensex slumped 456 points while the Nifty closed below the 18,300-level on Wednesday as market participants pared exposure to overbought counters for the second straight session.

Midcap and smallcap stocks too saw heavy selling amid concerns over frothy valuations, traders said.

The 30-share BSE Sensex ended 456.09 points or 0.74 per cent lower at 61,259.96. Similarly, the NSE Nifty dropped 152.15 points or 0.83 per cent to 18,266.60.

Titan was the top laggard in the Sensex pack, shedding 2.97 per cent, followed by HUL, NTPC, L&T, PowerGrid, Bajaj Finserv and M&M.

In contrast, Bharti Airtel led the gainers’ chart with a jump of 4.03 per cent.

SBI, IndusInd Bank, Bajaj Finance, Axis Bank, ITC and HCL Tech were the other winners.

“Indices corrected quite meaningfully led by the expensive side of the market where valuations had got stretched,” said S Ranganathan, Head of Research at LKP Securities.

Almost all sectoral indices ended in the red, although PSU banks were seen bucking the trend with investors cherry-picking for value in that pocket, he noted.

Further, he said the street is taking note of the cost pressures emanating from higher input costs in companies that do not possess the pricing power.

Vinod Nair, Head of Research at Geojit Financial Services, said, “The ongoing market correction is not an overreaction and can sustain in the near-term due to high valuations. However, in the future Indian corporates will benefit from the reforms and China plus one strategy which happened during 2020-21.”

“Alongside, the long-term economy and market trend is intact due to further re-opening of the economy, low-interest cycle and fiscal and private spending. This correction will give leeway for value-buying…,” he added.

Sectorally, BSE consumer durables, basic materials, metal, utilities and power indices lost as much as 3.36 per cent, while telecom closed in the green.

Broader BSE midcap and smallcap indices plummeted up to 2.31 per cent.

World stocks extended their gains as healthy corporate earnings offset worries over high energy prices and supply chain bottlenecks.

Elsewhere in Asia, bourses in Hong Kong and Tokyo closed higher, while Shanghai and Seoul were in the red.

Stock exchanges in Europe were trading mixed in mid-session deals.

Meanwhile, international oil benchmark Brent crude slipped 0.82 per cent to USD 84.38 per barrel.

The rupee surged by 47 paise to close at 74.88 against the US dollar on Wednesday.

Foreign institutional investors were net sellers in the capital market on Tuesday, as they offloaded shares worth Rs 505.79 crore, according to exchange data.

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