Sensex slumps 410 points, Nifty ends below 17,750; PSU banks rally

Indian benchmark equity indices closed in the red on Tuesday, dragged by losses in index majors Infosys, ICICI Bank, HDFC, Bajaj Finance and Bharti Airtel. Sensex ended 410.28 points or 0.68% lower at 59,667.60, while Nifty declined 106.50 points or 0.60% to 17,748.60.

“Following negative global cues and profit booking in IT and realty sectors, the domestic market hit rough weather, however, it witnessed a rebound towards the closing. Rise in US bond yield and crude oil price along with the Chinese crisis acted as key headwinds to the ongoing rally in the global market. Amid broad-based selling in the domestic market, public sector, energy and metal stocks traded higher,” said Vinod Nair, Head of Research at Geojit Financial Services.

Gainers & losers

Top gainers & losers on the Sensex.

Sectoral strand

Most sectoral indices ended in the red on the NSE. Nifty PSU Bank, closing 1.30% higher, was the top sectoral gainer followed by Nifty Pharma, up 0.79% and Nifty Metal, up 0.39%.

On the downside, the Nifty Realty slumped 3.38%, Nifty IT index dropped 2.24% and Nifty Media declined 1.79%. Nifty Bank and Nifty Auto indices were down nearly 1% each, while Nifty FMCG settled with a marginal loss of 0.16%.

The fear gauge index, India VIX spiked 2.65% to 18.53 levels.

Broader markets

Mirroring selloff in benchmark indices broader markets too corrected. The BSE MidCap index ended at 25,015 declining 180 points or 0.71% while the BSE SmallCap index lost 173 points or 0.62% to 27,814.
The market breadth turned negative as 1,741 shares declined compared to 1,514 advanced while 170 remained unchanged.

Global markets

Shares in Europe edged lower while Asian stocks were mixed on Monday, as global investors monitored a spike in U.S. bond yields and Chinese growth concerns.

European markets also continued to digest the fallout of the German election on Tuesday after the vote on Sunday resulted in more uncertainty for the country.

The center-left Social Democratic Party (SPD) gained the largest share of the vote with 25.7% by a slim margin, with Angela Merkel’s right-leaning bloc of the Christian Democratic Union and Christian Social Union gaining 24.1% of the vote.

Coalition negotiations between the main parties and two smaller counterparts, the Greens and Free Democrats, are likely to take weeks or even months. The SPD has previously rejected the option of forming another “grand coalition” with the CDU/CSU. Both parties have claimed a mandate to govern after the result.

On the data front, German consumer morale for October has brightened unexpectedly, according to the GfK institute’s consumer sentiment index, published Tuesday. The survey of around 2,000 Germans climbed to 0.3 points from a revised -1.1 points for September.

Other events in focus include ECB President Christine Lagarde’s speech at the ECB Forum on Central Banking and OPEC’s World Oil Outlook which is due Tuesday early afternoon.