Markets at close: Sensex ends below 79,000-mark, Nifty down 0.85% dragged by banks, metals; HDFC Bank top loser

Indian markets fell by around 1 percent on Tuesday, August 13, with the Sensex closing below the 79,000 mark and the Nifty dropping below 24,200. This decline was driven by a broad sell-off, primarily in banking, metals, and auto stocks. Furthermore, ongoing foreign fund outflows and mixed global market trends also contributed to the negative sentiment in domestic equities.

Blue-chip HDFC Bank, down 3.5 percent, contributed significantly to the indices' decline following the MSCI rebalancing announcement, which stated that the bank's weight would be increased in two separate tranches, contrary to the expectation of a single adjustment. Other bluechips including SBI, Tata Motors, ITC and Bajaj Finance also aided the losses.

The Sensex ended 692.89 points or 0.87 percent at 78,956.03. Meanwhile, the broader Nifty50 settled 208 or 0.85 percent lower at 24,139.

Broader markets also declined with the Nifty Midcap index down 0.8 percent and Nifty Smallcap index down 1.5 percent.

"The domestic market plunged into red terrain in the latter half, amidst mixed global sentiments. Recent IIP data indicates a lacklustre growth in the major manufacturing sector. Persistent selling by FIIs and elevated valuations is further contributing to the decline. Despite having minimal impact on the recent adverse developments, the market currently shifts attention towards underlying earnings growth, which remains bleak this quarter and may lead to a downgrade if resilience isn’t shown in subsequent quarters. All sectors, especially banking, metals, telecom, and fertilizers were in red, while HDFC Bank declined due to lower-than-expected passive fund inflows in the recent MSCI index rejig," said Vinod Nair, Head of Research, Geojit Financial Services.

Sectors and stocks

Dragged by HDFC Bank and other lending stocks, Nifty Financial Services, Nifty Bank, Nifty PSU Bank and Nifty Private Bank indices shed between 1.2-1.9 percent each.

Apart from these, Nifty Metal lost 1.6 percent, Nifty Oil & Gas declined 1 percent, Nifty Media cracked 0.95 percent, Nifty Auto fell 0.78 percent, Nifty Realty shed 0.73 percent and Nifty FMCG was down 0.28 percent.

Meanwhile, Nifty IT and Nifty Healthcare indices were flat but in the green.

Nifty Fin Services was the top sectoral loser, down 1.87 percent. Apart from HDFC Bank, Shriram finance, Cholamandalam Invst, PFC, and HDFC Life also lost over 2.5 percent each. Similarly in the Nifty Bank index, Bandhan Bank, SBI, Bank of Baroda, and Kotak Bank shed between 1-2.3 percent each.

Meanwhile, in the Nifty Metal index, Hind Zins was the top dragger, dowm 5.2 percent followed by Welspun Corp, SAIL, NALCO, and NBDC down over 2.5 percent each.

Titan, HCL Tech, Nestle India, Sun Pharma and Reliance Industries were the top 5 gainers on BSE while HDFC Bank, Tata Motors, Tata Steel, Bajaj Finance, and SBI were the top 5 losers in today's deals.

Technical View

Ajit Mishra – SVP, Research, Religare Broking

The markets continued their downward trend, losing nearly a percent as the correction phase persisted. Despite a flat start, the Nifty gradually declined, closing near the day's low at 24,140.70. The pressure was primarily due to a drop in banking and financial heavyweights, while IT majors attempted to limit the losses. Broader indices also struggled, with declines ranging from 0.8% to 1.3%.

Nifty is under pressure after failing to surpass the 20-day EMA resistance and appears poised to retest the 24,000 support zone. The decline in banking majors has disrupted the recovery, while other sectors are trading mixed. We recommend monitoring leveraged positions closely and waiting for clearer market signals.

Aditya Gaggar Director of Progressive Shares

After a muted opening, bears struck with full force, and the Index compounded its losses throughout the session to end the day lower at 24,139.00 with a cut of 208 points. Barring IT, all other sectors ended in red with Metal and PSU Banks being the major laggards. A mixed trend was observed in the Broader markets where Midcaps marginally outperformed while Smallcap ended with a loss of over 1% and underperformed. With a big red candle, the Index is comfortably back in the range of 23,960-24,400. We advise to wait until the Index provides a clear picture by violating either range.