MUMBAI: The stock market witnessed a sharp decline as it opened in negative territory on Wednesday, with the Sensex plummeting 900.68 points, starting at 72,228.90.
Simultaneously, the Nifty took a downturn of 243.30 points, kicking off at 21,786.00. Market sentiments were strongly bearish, reflecting concerns about the economic outlook.
Among the Nifty companies, the opening scenario showed 12 advances and 38 declines, painting a gloomy picture of the overall market health.
Notable gainers included HDFC Life, Adani Ports, TCS, and Infosys, while Ultra Cement made significant strides. On the flip side, HDFC Bank, Hindalco, Tata Steel, Bajaj Auto, and Axis Bank took a hit, emerging as the top losers.
The real shockwave came from HDFC Bank, witnessing a staggering 7 per cent drop, contributing significantly to Nifty’s 385-point decline and Bank Nifty’s plunge of 1200 points.
The overall market sentiment seemed to be impacted by HDFC Bank’s decline, signaling a broader market correction.
Analysts noted that Nifty had recently reached an all-time high of 22,124.15 but started showing signs of distribution at the top. Previous warnings about a potential correction in the range of 5-10 per cent seemed to be materializing.
Analysts emphasized that until the market surpassed recent highs, it would remain in a weakened state.
The significant drop in HDFC Bank was attributed to its first YoY earnings per share (EPS) decline in a decade, marking a disappointing quarter for the banking giant.
Net Interest Margins (NIMs) remained flat quarter-over-quarter, and borrowings outpaced deposit growth.
The stock’s fall reverberated through Nifty and Bank Nifty due to HDFC Bank’s heavyweight status in both indexes.
Varun Aggarwal, founder and managing director, Profit Idea, said, “Market participants expressed concerns about the broader economic landscape, with uncertainties surrounding global economic conditions, supply chain disruptions, and rising inflationary pressures.”
The disappointing performance of a banking heavyweight like HDFC Bank further fueled apprehensions about the resilience of the financial sector amid these challenges.
Analysts highlighted that the market would closely watch for cues that could indicate a potential recovery or further downside.
The quarterly reports of other major companies, global economic developments, and central bank policies were identified as critical factors that could sway market sentiment in the coming weeks.
Investors and traders braced themselves for increased volatility, adjusting their strategies to navigate the evolving market conditions.
The coming days would likely witness heightened scrutiny of corporate earnings and economic indicators, influencing the trajectory of the Indian stock market. (ANI)