Tech, banking stocks bleed on bourses

Mumbai: Benchmark BSE Sensex and Nifty slid by nearly one per cent on Tuesday due to profit booking in IT, banking and FMCG shares ahead of the expected aggressive rate hike by the US Federal Reserve. Marking its second straight day of losses, the 30-share BSE benchmark declined by 497.73 points or 0.89 per cent to settle at 55,268.49, with 22 of its constituents ending in the red. During the day, it tanked 562.79 points or 1 per cent to a low of 55,203.43. The broader NSE Nifty declined by 147.15 points or 0.88 per cent to 16,483.85 after 38 of its stocks succumbed to profit taking. Nifty had risen by over 5 per cent in the six-day rally to Friday.

"The Fed's meeting commencing Tuesday, which is expected to maintain its aggressive rate hike of 75 bps (basis points), and recession fears, especially in western markets, weighed on market sentiment. Even though the domestic market is showcasing strength, the spillover effect from the western market is inevitable," said Vinod Nair, head (research) at Geojit Financial Services.

Investors are worried that aggressive rate hikes by the US Fed and similar action by central banks in Europe and Asia may hurt global economic growth, analysts said. "Participants were in the profit-taking mood from the beginning which resulted in a gradual decline in the index. Apart from the mixed earnings, caution ahead of the US Fed meet and GDP data was also weighing on the sentiment," said Ajit Mishra, V-P (research), Religare Broking Ltd.

"Domestic equities saw a lacklustre movement and traded in negative territory throughout the day amid weak global cues. Nifty opened flat and fell right from the initial tick amid selling pressure," said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services Ltd.

Foreign institutional investors (FIIs) offloaded shares worth Rs 844.78 crore on Monday, as per exchange data.

In the broader market, the BSE midcap gauge declined by 1.21 per cent and smallcap index fell by 1.20 per cent. All the BSE sectoral indices ended lower, with IT falling the most by 2.84 per cent, followed by teck (2.23 per cent), FMCG (1.32 per cent) and capital goods (1.28 per cent).