Stock markets plunge as panic selling continues

Mumbai: Benchmark Sensex and Nifty plunged nearly one per cent on Wednesday due to heavy selling in financial and IT shares as the ongoing tensions in the Middle East unnerved investors. Falling for the fifth day running, the 30-share BSE Sensex tanked 522.82 points or 0.81 per cent to settle at 64,049.06 with 24 of its components ending in the red. The index plunged by 2,379 points in the five sessions. The Nifty declined by 159.60 points or 0.83 per cent to 19,122.15. In the five sessions, the index lost around 690 points.

“Investor sentiment is on edge as tensions in West Asia continue to drag the market. Despite a drop in oil prices and an optimistic view of the progressing Q2 results season, investors took a cautious approach due to the expectation that a higher interest rate scenario would continue slowing future growth. A positive strategy is evident on large-cap stocks, amid growing geopolitical worries and valuation concerns in mid and small-cap stocks, as overall earnings growth is being sustained,” said Vinod Nair, head (research) at Geojit Financial Services.

“The market was waiting for an opportunity for profit-booking - the recent hike in bond yields to 5 per cent, increased geopolitical tensions risking a flare-up in the Middle East as well and early in-line corporate results have all just provided the platform for much-awaited correction,” said Pawan Bharaddia, Co-founder, Equitree.

In the broader market, the BSE smallcap gauge declined 0.77 per cent and midcap index fell 0.52 per cent. Among the indices, teck dropped 1.39 per cent, telecommunication fell by 1.29 per cent, utilities (1.25 per cent), IT (1.13 per cent), power (1.09 per cent), financial services (0.83 per cent), realty (0.80 per cent) and bankex (0.70 per cent). Metal emerged as the only gainer. In the broader market, the BSE smallcap gauge declined 0.77 per cent and midcap index fell 0.52 per cent.

Foreign Institutional Investors (FIIs) bought equities worth Rs 252.25 crore on Monday, according to exchange data.Equity markets were closed on Tuesday on account of Dussehra festival.

Among the Sensex firms, Infosys fell the most by 2.76 per cent. Bharti Airtel, NTPC, Tata Motors, IndusInd Bank, Bajaj Finance, ICICI Bank, Tech Mahindra, Titan and Axis Bank were among the major laggards. Tata Steel, State Bank of India, Mahindra & Mahindra, Maruti and Nestle were the gainers.