Sensex, Nifty plunges over 1% as IT, financial shares drop

A bird flies past a screen displaying the Sensex results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai, on February 1, 2023.
| Photo Credit: Reuters

Benchmark stock indices Sensex and Nifty declined by more than 1% in opening trade on Friday due to heavy selling in financials, IT and capital goods stocks amid weak global trends.

The 30-share BSE barometer plunged 730.17 points or 1.22% to 59,076.11 as 25 of its constituents traded in the red. The index opened lower and fell to a low of 59,062.72 in early trade.

The broader Nifty of the National Stock Exchange tanked 201.05 points or 1.14% to 17,388.55 in opening trade. As many as 45 of Nifty shares traded in the red with Adani Enterprises, HDFC twins, and IndusInd Bank emerging as the biggest losers.

Heavy selling in financials, banking, IT, and capital goods shares triggered by weak Asian markets and overnight losses in the U.S. market dragged down the benchmark indices, analysts said.

“The sell-off in U.S. markets was triggered by a crash of 60% in SVB Financials- a bank that mainly funds start-ups. This impacted sentiments and banking stocks took a beating on concerns that rising interest rates might trigger loan repayment defaults,” V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.

HDFC fell the most by 2.53% among Sensex shares. IndusInd Bank, HDFC Bank, L&T, ICICI Bank, Reliance Industries, Axis Bank, Infosys, TCS and Ultratech Cement were among major losers.

Tata Motors bucked the trend gaining 0.75%. Bharti Airtel and Maruti also advanced.

In Asia, markets in Hong Kong, Shanghai, Tokyo, and Seoul declined following losses in U.S. shares. Hong Kong’s Hang Seng dropped by 2.45%, South Korea’s Kospi by 1.21%, Shanghai by 1.15%, Japan’s Nikkei by 1.36%.

In the U.S., the S&P 500 tumbled 1.8%, The Dow Jones Industrial Average shed 1.7% and the Nasdaq composite fell 2.1% as investors remain anxious about the prospect of more aggressive action by the Federal Reserve to fight inflation with higher interest rates.

The 30-share BSE Sensex ended 541.81 points or 0.90% lower at 59,806.28, while the broader NSE Nifty declined 164.80 points or 0.93% to 17,589.60.

Foreign Institutional Investors (FIIs) emerged as net sellers in the capital market on Thursday as they sold shares worth ₹561.78 crore, according to exchange data.