The Indian benchmark indices extended the opening losses, with the Nifty 50 even briefly falling below 22,000 in the second half of trade on February 28, majorly dragged by a decline in frontline financial names. Heavyweights like HDFC Bank, Axis Bank, SBI and ICICI Bank fell around 1 percent each, which along with the over 2 percent decline in RIL, weighed on the two benchmarks.
The market also took cues from the global markets which remained weak ahead of the release of the personal expenditures price index data due on Thursday.
The broader market was also under intense selling pressure the BSE midcap index and BSE smallcap index down 2 percent each. Concerns over frothy valuations within the broader market have been making the rounds since the past few months, which has prompted investors to constantly book partial profits.
Investors are closely eyeing the US macroeconomic data as it will give cues to the Federal Reserve's possible rate-cut trajectory.
At 1.51 pm, the Sensex was down 560.50 points or 0.77 percent at 72,534.72, and the Nifty was down 182.80 points or 0.82 percent at 22,015.50. Nearly four stocks fell for each one that rose. About 670 shares rose, 2,600 fell, and 53 remained unchanged.
High volatility also persisted ahead of the expiry of the monthly derivatives series, due at market close on Thursday. As a result, the 'volatility gauge' India VIX, rose over 3 percent to 16.25.
Sectoral Trends
All sectoral indices were down in the afternoon. Among frontline sectors, banks, automobiles, energy, infra and metals faced strong selling while information technology was marginally down.
Nifty Media, Nifty Realty, and Nifty PSU Banks were down by over 2 percent each.
Fundamental View
V K Vijayakumar, the chief investment strategist at Geojit Financial Services anticipates the present range-bound consolidation phase to continue for some time in the absence of strong positive or negative triggers.
In the anticipation of the a few US macroeconomic data, most analysts expect the market to take a breather in the near-term.
Technical View
"Traders seem to be awaiting a catalyst for a momentum shift, and the next significant movement will likely occur once this range of 22,000 - 22,300 is breached on a sustained closing basis," said Sameet Chavan, Head Research, Technical and Derivative - Angel One.
Until then, Chavan suggests traders to opt for a buy-on-dip strategy ahead of the monthly expiry. "The primary focus remains on individual stocks, as some counters demonstrate strength in these lackluster markets," he added.
However, he advised investors to exercise caution and refrain from
aggressive positions in small and midcaps, given the negative divergence observed on key momentum indicators, which does not bode well for the broader market.
Key Nifty gainers
Tata Consultancy Services, SBI Life Insurance, Infosys, HDFC Life, and Tech Mahindra
Key Nifty losers
Apollo Hospitals, Bajaj Auto, Power Grid Corporation of India, Coal India, and Eicher Motors
Key Sensex gainers
Tata Consultancy Services, Infosys, Hindustan Unilever, Tech Mahindra, and Bharti Airtel
Key Sensex losers
Power Grid Corporation of India, Maruti Suzuki, Asian Paints, Mahindra & Mahindra, and Wipro
Stock moves
Wipro: Shares declined over 2 percent to Rs 520 per share after analysts at Kotak Institutional Equities downgraded Wipro to 'sell' from 'reduce' with a target price of Rs 440 per share following the stock's sharp upmove in the last 3 months. The brokerage firm believes that the company's valuations are expensive.
DreamFolks Services: Shares surged 7.3 percent after domestic brokerage firm Motilal Oswal initiated coverage on the airport services aggregator with a "buy" call.
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