The last hour of the trading session saw the Indian benchmark indices lose ground on Tuesday as weak global cues and the recent rally in the markets saw investors squaring off positions in index heavyweights.
The 30-share Sensex, which gained over 230 points intra day, finally settled at 38,276.63, down 323.71 points, or 0.84%.
Incidentally, the benchmark traded in a range of nearly 600 points during the day before closing near the day’s low of 38,236.18. The broader Nifty ended the day at 11,497.90, down 100.35 points, or 0.87%. This was also the fifth consecutive day of losses for both the benchmarks. “Weak global cues and a correction to a sharp rally over the last six weeks saw markets tumbling in the last hour,” said Arun Kejrwial of Kejriwal Research & Investment Services.
“While markets could weaken further, one needs to remember that the mega events —election exit poll and actual results — are still eight trading sessions and 12 trading sessions away,” he added.
Incidentally, sentiment also took a beating on the back of Essar Steel again challenging the bid of ArcelorMittal.
“With Essar Steel once again questioning the validity of the bid of ArcelorMittal, it has raised concerns of a delay in the recovery of money by the banks.
“This led to most banking stocks losing ground in the last leg of the trading session,” Abhimanyu Sofat, head of research, IIFL Securities, said.
The Nifty Bank index lost 1.12% as banking majors such as like ICICI Bank and State Bank of India, Yes Bank, Indusind Bank and Kotak Mahindra Bank all ended the day in the red. The overall bearish sentiment was further corroborated by the weak market breadth with almost nearly 1,700 stocks declining , which was — nearly double the number of gainers at 851.
The markets had been witnessing an inherent weakness in the recent past that got accentuated after the escalation of trade war between the U.S. and China.
On Tuesday, some of the Asian markets managed to regain ground, even as the overnight U.S. markets traded in the red.
Meanwhile, the Indian markets are trading weak even as foreign investors pumped in record money in the two months of March and April. The cumulative flows in the two months was in excess of ₹55,000 crore.
U.S. indices plunge
Wall Street’s main indexes tumbled more than 1% on Tuesday, as renewed worries over trade negotiations with China stoked global growth worries and kept investors away from risky assets.
At 8.25 p.m. the Dow Jones Industrial Average was down 355.41 points, or 1.34%, at 26,083.07.
The S&P 500 was down 42.23 points, or 1.44%, at 2,890.24 and the Nasdaq Composite was down 138.67 points, or 1.71%, at 7,984.62. (With Reuters inputs)