Sensex spirals lower for fourth day; bank stocks buck trend

The Sensex and Nifty spiralled lower for the fourth session on the trot on Wednesday as investors remained on edge ahead of US inflation data, which will give clues on the Federal Reserve’s policy tightening trajectory. Unabated selling by foreign institutional investors and a jump in crude prices also weighed on sentiment, traders said.

Despite a firm start, the 30-share BSE Sensex failed to carry forward the momentum and ended at 54,088.39, lower by 276.46 points or 0.51 per cent. During the day, it tumbled 845.55 points to 53,519.30. Similarly, the NSE Nifty slipped 72.95 points or 0.45 per cent to settle at 16,167.10.

Larsen & Toubro was the top laggard in the Sensex pack, tumbling 2.34 per cent, followed by Bajaj Finserv, Bajaj Finance, PowerGrid, NTPC, Infosys, Maruti, ITC, Tech Mahindra and Wipro. In contrast, Axis Bank, IndusInd Bank, HDFC, Kotak Mahindra Bank, HDFC Bank, Bharti Airtel and ICICI Bank were among the gainers, jumping up to 1.92 per cent.

Investors continue to remain wary despite global markets trading in green due to drop in domestic investors confidence and FII selling. The market turned volatile waiting for the release of April US inflation data, which is expected to cool down marginally. “Inflation will continue to be elevated but the chance of major reactions is low because it has been factored in by the markets. The major determinant for market direction would be the pace of decline in inflation in response to the Fed measures,” said Vinod Nair, Head of Research at Geojit Financial Services.

In the broader market, the BSE smallcap gauge tumbled 2.23 per cent while the midcap index dipped 0.46 per cent. Among BSE sectoral indices, capital goods tanked 1.63 per cent, followed by IT (1.50 per cent), industrials (1.39 per cent), telecom (1.22 per cent) and teck (1.07 per cent). Realty, bank and finance were the gainers.

Elsewhere in Asia, markets in Tokyo, Hong Kong, Shanghai ended with gains, while Seoul settled marginally lower. Equity markets in Europe were quoting higher in the afternoon session. “On the global front, Asian markets were divided, while European markets were higher ahead of the release of US inflation data, which may provide a clue as to how aggressively the Federal Reserve would hike interest rates,” said Mohit Nigam, Head – PMS, Hem Securities.

Meanwhile, international oil benchmark Brent crude jumped 3.12 per cent to USD 105.7 per barrel. The rupee appreciated further by 10 paise to settle at 77.24 (provisional) against the US dollar on Wednesday as the American currency retreated from its 20-year high levels. Continuing their selling spree, foreign institutional investors offloaded shares worth a net Rs 3,960.59 crore on Tuesday, according to stock exchange data.

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