Sensex plunges 1,545, Nifty closes below 17,200; real estate, metals stocks take a nosedive

“Markets have corrected in recent days on fears of interest rate hikes in developed economies and continued reductions in stimulus. Although the Covid-19 numbers are still something to ponder, but the Omicron variant isn’t as severe made the market believe that the era of easy liquidity seems to be coming to an end.The Nasdaq corrected about 14%, which tarnished the luster of very good numbers and local IT advice,” says Devang Mehta, Head – Equity Advisory, Centrum Wealth.

“More than the index correction, this wave of volatility corrected many good companies, which should ideally be used as an opportunity in adversity. An approach of buying quality franchisees and market-leading companies gradually or in installments will allow you to take advantage of the volatility, as we approach the Union budget in the middle of the current third quarter earnings season,” added Mehta.

Sector indices bleed into the red

All the sector indices have settled into negative territory, with the real estate, metal, automotive, IT, electricity and pharmaceutical indices ranging between 2.6%.

The BSE real estate index became the biggest loser, ending down 5.94%, led by Sunteck Realty, Sobha, Godrej Industries, Indiabulls Real Estate and DLF. The real estate sector was followed by the metals index, which closed down 5.03%. The worst performers in the metals index were Jindal Steel & Power, JSW Steel, Tata Steel, Hindalco Industries and Steel Authority of India (SAIL), which fell as much as 7%.

Main losers

All 30 shares of BSE Sensex closed in the red, while the biggest losses were Tata Steel, Bajaj Finance and Wipro. Tata Steel, the country’s largest steelmaker, was the worst performer with a 6% loss, followed by Bajaj Finance and Wipro, which fell 5.97% and 5.35%, respectively. Other notable losers include Tech Mahindra, Titan Company, Reliance Industries, HCL Tech, Bajaj Finserv, Asian Paints and Kotak Mahindra Bank, which fell as much as 5%.

Shares in the news

Trusted industries: Shares of the nation’s most valuable company by market capitalization fell 4% in line with the broader market, even after reporting strong earnings for the December quarter of the current fiscal year. The billionaire-led company Mukesh Ambani on Friday reported a 37.9% growth in its consolidated net profit to ₹20,539 crore for the quarter ended December 31, 2021, from ₹14,894 crore a year ago. The oil-telecom conglomerate recorded a 52.2% increase in revenue to ₹2,09,823 crore in Q3FY22 from ₹1,37,829 crore in the corresponding quarter of FY21.

YES Bank: Shares of private sector lenders ended down 2.2%. The bank on Saturday reported a 77% year-on-year increase in consolidated net profit to ₹266 crore for the third quarter ending December 31, 2021, the highest since December 2018. However, total revenue fell to 5,632, ₹03 crore vs ₹6,408.53 crore in the same period last financial year.

Bandhan Bank: The private sector lender’s share price rose 3.7% after posting a 36% year-on-year growth in net profit to ₹859 crore in the October-December quarter from 632.6 ₹ crores a year ago.

ICICI Bank: The private bank’s share price fell 0.8% despite growth in net profit of more than 25% for the December quarter, helped by lower provisions and higher net interest income. Net profit jumped to ₹6,193.81 crore in Q3FY22 from ₹4,939.59 crore in the same quarter of the corresponding year.

Vodafone idea: The debt-laden telecom’s share price plunged 8% after its consolidated loss widened to Rs 7,230.9 crore for the third quarter ended December 2021 from a loss of Rs 4,532.1 crore. rupees at the same period a year ago.

Global markets follow Wall Street lower

In the overseas market, stocks in the Asia-Pacific region closed mostly lower on Monday, following weak signals from Wall Street. Market sentiment was shaken by rising US Treasury yields and crude oil prices which reignited fears of a spike in inflation and a tightening of US monetary policy.

South Korea’s KOSPI became the region’s biggest loser with a 1.5% decline. It was followed by the Hang Seng index in Hong Kong, which plunged 1.24%.

In a similar trend, the Indonesia Jakarta Composite lost 1%, while the Thai SET Composite fell 0.74%. The Straits Times index in Singapore fell 0.35%, while the ASX 200 index ended down 0.5%.

Contrary to the trend, Japan’s Nikkei 225 index ended up 0.24%, paring early losses, while Taiwan’s weighted index rose 0.5%.

In mainland China, Shanghai Composite and Shenzhen Component gained 0.04% and 0.37% respectively.

Meanwhile, European stocks were trading lower in early trading, extending the loss for the third day on looming fears of a possible rate hike by the US Federal Reserve. The German DAX lost 1.7% in early trading, while the French CAC index fell 1.6%. In a similar trend, Britain’s FTSE 100 index fell 1%, while Spain’s IBEX index fell 1.9%.

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