Global cues, private banks drag Sensex 162 pts; Nifty loses 5% in February

The market extended losses for second consecutive session on Wednesday as benchmark indices fell half a percent each, weighed by global cues after new Federal Reserve Chair Jerome Powell hinted more rate hikes.

Private banks, FMCG and metals stocks pulled the market lower; but Infosys and Reliance Industries (up 0.4 percent) capped losses. PSU banks also rebounded in later part of the session due to short covering.

The 30-share BSE Sensex was down 162.35 points at 34,184.04 and the 50-share NSE Nifty declined 61.40 points to 10,492.90 amid volatility.

In the month of February, the Sensex and Nifty lost nearly 5 percent after showing around 5 percent rally in January.

The broader markets fared better than frontline indices as the Nifty Midcap index closed flat. About three shares declined for every share rising on the BSE.

Global markets were under pressure especially after New Federal Reserve chairman Jerome Powell in his first congressional testimony on Tuesday signalled that the Fed could keep raising interest rates to contain inflation.

Asian markets closed lower with the Japan’s Nikkei, China’s Shanghai and Hong Kong’s Hang Seng falling 1 percent each while European indices – France’s CAC, Germany’s DAX and Britain’s FTSE – were down 0.3 percent each at the time of writing this article.

Back home, PSU banks rebounded in last couple of hours of trade mostly on short covering. Nifty PSU Bank index fell 2.6 percent in early trade, before closing up 0.7 percent.

Indian Bank, OBC, Syndicate Bank, PNB and Union Bank gained 2-7 percent. State Bank of India closed mildly higher.

Private banks remained under pressure after ICICI Bank, which lost 2.8 percent, disclosed its loan exposure to Gitanjali Group. Nifty Bank index declined 1 percent. HDFC Bank, HDFC, Axis Bank and Yes Bank were down 1-1.8 percent.

Infosys shares gained 2 percent after the Indian rupee hit fresh 3-month low of 65.31 (intraday) against the US dollar.

UPL shares gained a percent after Motilal Oswal has initiated coverage with a Buy call and target price of Rs 945 per share, valuing the company at 17x FY20 EPS of Rs 55.60. It expects the company to clock 12 percent revenue CAGR & 14 percent PAT CAGR over FY18-20.

HPCL lost 3 percent as the stock adjusted for dividend.

Ahead of February auto sales data due on March 1, M&M, Tata Motors, Maruti Suzuki and Bajaj Auto were down 0.5-1.5 percent while Eicher Motors gained a percent.