Sensex slips 273 points, Nifty ends below 15,750; Dr Reddy’s tanks over 10%

After trading rangebound in the first half of the day, domestic benchmark equity indices slipped into the red tracking losses in index majors RIL, Dr Reddy’s, Axis Bank and Kotak Bank. Sensex settled 273 points or 0.52% lower at 52,578, while the Nifty lost 78 points or 0.49% to end at 15,746.

“Domestic market skewed in favour of the bears, failing to hold onto its early gains due to weak global cues and selling in pharma stocks. Bleeding pharma companies pulled down the market due to a weak start to sector earnings season. It created panic as the sector is priced with high expectations. Broadly, barring metals and consumer durables, all major sectors traded in negative territory. Following heavy selling in China and weakening Asian peers ahead of the crucial Fed Reserve policy meeting stated this week,” said Vinod Nair, Head of Research at Geojit Financial Services.

Gainers & losers

Top gainers and losers on Sensex.

Sectoral strand

Barring Nifty Metal (up 1.46%) all other major sectoral indices were trading with losses. Nifty Pharma plunged 4.33%. Dr Reddy’s plummeted over 10% after it received a subpoena from the US  SEC for the production of documents pertaining to certain CIS (Commonwealth of Independent States) geographies

That apart Nifty Bank, Nifty Auto, Nifty FMCG, Nifty Realty and Nifty IT lost up to 0.75%. Fear gauge index India VIX spiked 6.28% to 13.23 levels.

Broader market

The pain in the broader market was much severe compared to benchmark indices. BSE MidCap index closed 0.67% lower to 22,879. On the other hand, the BSE SmallCap index settled at 26,485 down 0.11%.

Market breadth was neutral as 1,602 shares advanced on the BSE, while 1,662 declined and 110 remained unchanged.

Global markets

European markets tumbled across the board on Tuesday, 27 July 2021 as investors continued to monitor corporate earnings, along with extreme weather and the spread of Covid-19 across the continent.

Asian stocks traded mixed even as several major Chinese tech stocks in Hong Kong remained under pressure following a Monday tumble. Investors continued to assess the steep losses incurred in Chinese stocks sparked by Beijing’s sweeping regulatory overhaul.

Economy

The second wave of Covid-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery, Moody’s Analytics said on Monday.

The Delta variant of Covid-19 is among factors now adversely affecting economies of the Asia-Pacific (APAC) region, but the economic hit from the current round of movement restrictions in the region will not be as severe as the recessions in the second quarter of last year.

In India, where exports make up relatively small shares of the economy, high commodity prices have boosted the value of exports. This is one factor that helped reinvigorate India after its first devastating wave of Covid-19.