Sensex Cracks 736 Points, Nifty Tests 21,800 In Broad-Selling; IT Index Sheds 3%

Indian equities tumbled across the board on Tuesday as investors waited for the US Federal Reserve’s interest rate decision on Wednesday. Besides, market regulator Sebi’s repeated warnings against “froth” in the broader market kept the overall sentiment in check.

The S&P BSE Sensex crashed 736 points, or 1.01 per cent, to end at 72,012 levels, while the Nifty50 shut shop at 21,817, down 238 points or 1.08 per cent.

TCS was the biggest laggard on the benchmark indices, down 4 per cent after Tata Sons likely sold about 0.6 per cent stake in the company. That apart, Nestle India, IndusInd Bank, Wipro, Infosys, HCL Tech, ITC, Power Grid, Tech M, Sun Pharma, Tata Motors, L&T, Asian Paints, SBI, Axis Bank, and Ultratech Cement were the other top losers.

In the broader markets, the BSE MidCap and SmallCap indices shed 1.36 per cent and 1 per cent, respectively.

Among sectors, the Nifty IT index edged 2.9 per cent lower, the Nifty Media 2.45 per cent, and the Nifty Pharma, and FMCG 2.2 per cent each.

Here are the top factors that led to a selloff on Dalal Street today:

Global Stocks on Back Foot

A gauge tracking Asia’s benchmarks remained on the back foot, dragged down by losses of more than 1% each in Hong Kong’s technology shares and South Korean equities. Meanwhile, contracts for US shares pointed to losses.

Japan’s Nikkei share average swung between small gains and losses after the Bank of Japan on Tuesday announced an end to its long-running ultra-accommodative stimulus programmes, as widely expected.

IT Stocks Drag

IT major TCS emerged as the top Sensex laggard, experiencing a 3% decline. This dip coincided with 2.02 crore or 0.6% shares changing hands in a block deal on the counter. Other IT counters – HCL Tech, Wipro and Infosys – also traded with cuts, weighing on the index.

Overall, the IT index was down 2%, the worst sectoral loser today.

Global cues

In Asia this morning, Nikkei and Hang Seng slipped 0.7 per cent each. Kospi declined 1.3 per cent, whle Shanghai, Straits Times and Taiwan were marginally in red.

Overnight in the US, the S&P 500 and Nasdaq gained up to 0.8 per cent ahead of the US Fed meet later this week, where the central bank is expected to keep rates steady and provide cues on its monetary policy trajectory. Dow Jones added 0.2 per cent.

The US 10-year treasury bond yield quoted around 4.33 per cent in the run-up to the US Fed meet. Brent Crude Oil futures hovered around $87 per barrel.