All major sectors witnessed selling pressure and ended in the red on Monday – with the Nifty Bank, PSU Bank, and metal being the worst-hit.
Benchmark indices registered their worst fall in over 10 months, tracking global equities amid the ongoing tussle between Russia-Ukraine and oil prices surging to a seven-year high. After falling 1,857 points intra-day, the Sensex settled lower by 1,747.08 points or 3% at 56,405.84 on Monday. The Nifty-50 ended the day at 16,842.80, down 531.95 points or 3.06%. The market’s fear gauge – volatility index India (VIX) rose 23% to 22.98 during the trading session on Monday.
All major sectors witnessed selling pressure and ended in the red on Monday – with the Nifty Bank, PSU Bank, and metal being the worst-hit, falling 4.1%, 5.9%, and 5.06%, respectively. The Nifty Bank index fell to its day’s low of 36,828.05, registering its biggest fall since April 12, 2021.
“Nifty fell sharply for the second consecutive session on February 14 following weak global cues. Global stocks tumbled after the White House warned of a possible imminent Russian invasion of Ukraine. Markets witnessed the worst one-day percentage fall in the last 10 months. Sentiment in the banking stocks, especially SBI and ICICI Bank, took a turn for the worse over the weekend, when investors were reminded of an old case of alleged fraud of Rs 23,000 crore by ABG Shipyard. Nifty Bank crashed by 4.3% during the session,” Devarsh Vakil, deputy head – retail research, HDFC Securities, told FE.
Tata Steel, HDFC and SBI were the top losers, falling more than 5% each, whereas TCS was the only Sensex gainer. Among broader markets, the BSE mid-cap and small-cap indices ended lower by 3.5% and 4.1%, respectively. The overall market breadth also favoured the bears as only 567 scrips advanced, while 2,984 declined on the BSE. As a result, investors lost over Rs 8.5 lakh crore during the fall on Monday, as the market capitalisation of BSE listed companies declined to Rs 255.40 lakh crore from Rs 263.90 lakh crore on Friday.
Elsewhere in Asia, too, markets remained broadly negative, as investors fretted over geopolitical risks and rising crude oil prices. Japan’s Nikkei 225 fell 2.2%, Hong Kong’s Hang Seng declined 1.3% and China’s Shanghai Composite declined 0.9%.
Back home, analysts expect volatility in the markets to increase going forward, as outflows from FPIs, coupled with a possibility of liquidity drying up during the mega LIC IPO in March could result in further weakness in the markets. “The government planning the mega IPO of LIC in March can suck up liquidity in the capital market, as Rs 70,000 crore is a huge number to deal with – especially in the last month of the fiscal. Till the time the global uncertainty continues, market volatility is expected to remain on the higher side,” said Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services.
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