Sensex tanks over 500 points, Nifty ends below 14,250

The benchmark Sensex dived nearly 531 points to close at 48,348 on Monday, extending its losses to the third straight session due to massive selling in energy and IT stocks.

After swinging nearly 1,000 points during the session, the BSE benchmark settled with a loss of 530.95 points or 1.09 per cent at 48,347.59. The 30-share index opened over 375 points higher and hit the day’s high of 49,263.15 before succumbing to selling pressure that took the index to the session's lowest point at 48,274.92.

The broader NSE Nifty plunged 133 points or 0.93 per cent to end the session at 14,238.90. Over the last three sessions, the BSE Sensex has lost 1,444.53 points or 2.90 per cent and the NSE Nifty has shed 405.80 points or 2.77 per cent.

"Domestic equities were quite volatile today and gave up all early hours’ gains. Investors continued to prefer in taking profits off the table ahead of union budget and F&O expiry. Barring pharma and select financials, most of key sectoral indices were in pressure today," Binod Modi, Head Strategy at Reliance Securities, said.

Vinod Nair, Head of Research at Geojit Financial Services stated that Indian markets witnessed a highly volatile trade due to weak global market and reports of Indo-China border tension.

"Policy decisions of the US Fed meeting which will commence tomorrow will drive the global market in the coming days. We have seen Indian markets being highly volatile these days and this trend is expected to continue this week as we inch closer to the Union Budget," Nair added.

On the Sensex chart, Reliance Industries fell 5.36 per cent despite posting better-than-estimated earnings. IndusInd Bank, HCL Tech, Asian Paints, UltraTech Cement and PowerGrid also declined. Of the Sensex constituents, 21 closed in the red and only nine in the green.

Among the gainers were Axis Bank, Sun Pharma, Bajaj Auto, Bajaj FinServ, HDFC Bank and Dr Reddy’s. Analysts are of the view that markets may remain volatile in this holiday-shortened week amid monthly derivatives expiry, quarterly earnings and the upcoming Union Budget. Among the major sectoral losers were BSE energy (4.44 per cent), oil & gas (2.16 per cent), power (1.41 per cent), industrials (1.32 per cent) and IT (1.31 per cent).

In the broader market, largecap index performed better than the benchmark Sensex, falling 0.90 per cent. On the other hand, midcap and smallcap indices underperformed the benchmark, dropping by 1.14 per cent and 1.15 per cent, respectively. On the other hand, Grasim was in focus on Monday as it jumped 6.44 per cent after it announced its foray into paints business.

Analysts said that corporate earnings so far have been quite impressive as earnings exceeded analysts’ estimates in most of the companies. Further, vaccination drive started well in India, which along with continued improvement in recovery rate offers domestic equities an edge over other markets.

On Nifty, Rohit Singre, Senior Technical Analyst at LKP Securities, said that the index has breached all good support which hints if index managed to sustain below Monday’s low then index may hit 14k mark soon which is strong support on the downside, on the higher side now index has good resistance near 14350-14440 zone again that would be profit booking levels for longs. Asian shares closed higher on Monday. Indian equity markets will remain closed on Tuesday for the Republic Day.

On the forex front, the rupee ended 3 paise higher at 72.94 against the US dollar. Meanwhile, Brent crude, the global oil benchmark, was trading 0.56 per cent higher at USD 55.69 per barrel on Monday.