Sensex Skids as Wary Investors Weigh Macro, Liquidity Risks

Mumbai: Benchmark Sensex settled with losses in a choppy session Wednesday as buying sentiment remained subdued amid liquidity concerns in the NBFC space.

Investors also remained on the sidelines ahead of US Federal Reserve's policy outcome as well as expiry of September derivative contracts Thursday, brokers said.

On the global front, crude oil traded above USD 81 per barrel while the trade spat between the US and China showed no signs of easing.

The BSE Sensex tumbled 109.79 points to 36,542.27, and the broader NSE Nifty shed 13.65 to close at 11,053.80.

IT and FMCG counters came under robust selling pressure, while stock-specific action was seen in banking and financial service sectors.

The 30-share Sensex touched a high of 36,938.74 at the outset after domestic investors pressed on with buying. However, it soon turned choppy and hit a low of 36,357.93. It finally closed lower by 109.79 points, or 0.30 per cent, at 36,542.27.

The NSE Nifty closed lower by 13.65 points, or 0.12 per cent, at 11,053.80. Intra-day, it shuttled between 11,145.55 and 10,993.05.

On a net basis, foreign institutional investors (FIIs) sold shares worth Rs 1,231.70 crore Tuesday, while domestic institutional investors (DIIs) bought equities to the tune of Rs 2,284.26 crore, as per provisional data.

"Worries over liquidity issues in NBFC space demoralised investors in domestic markets. Market staid on a cautious sentiment ahead of Fed policy outcome and higher oil price as major OPEC producers declined to increase the output.

"Volatility in global markets is likely to remain elevated in the short term given cancellation of trade talks between US and China," said Vinod Nair, Head of Research, Geojit Financial Services.

Tata Motors emerged as the top loser among the Sensex constituents, tumbling 3.15 per cent, followed by Wipro at 2.91 per cent.

Other losers included ITC 2.67 per cent, SBI 2.31 per cent, Maruti Suzuki 1.99 per cent, TCS 1.91 per cent, HUL 1.44 per cent, Infosys 1.20 per cent, NTPC 1.15 per cent, ONGC 1.10 per cent, Kotak Bank 1.08 per cent and Coal India 0.98 per cent.

Yes Bank spurted 1.73 per cent after its board Tuesday sought at least a three-month extension for MD and CEO Rana Kapoor from RBI.

Other winners were Vedanta Ltd 4.70 per cent, RIL 1.72 per cent, Tata Steel 1.52 per cent, L&T 1.05 per cent, HDFC Bank 0.80 per cent and ICICI Bank 0.76 per cent.

Sugar stocks ended lower despite the Cabinet Wednesday approving a Rs 5,500 crore package for the sugar industry.

In sectoral terms, the BSE IT index fell 1.60 per cent, FMCG 1.44 per cent, teck 1.36 per cent, auto 0.99 per cent, PSU 0.14 per cent and power 0.01 per cent.

However, metal index rose 1.73 per cent, realty 1.69 per cent, capital goods 1.23 per cent, energy 1.08 per cent, oil and gas 0.62 per cent, healthcare 0.40 per cent, consumer durables 0.14 per cent and bankex 0.04 per cent.

Outperforming the overall trend, broader markets ended higher as investors accumulated select stocks after recent losses. The BSE mid-cap index rose 0.42 per cent and small-cap index gained 0.12 per cent.

Elsewhere in Asia, Hong Kong's Hang Seng advanced 1.15 per cent, while Japan's Nikkei rose 0.39 per cent.

Shanghai Composite index too gained 0.92 per cent.

In Europe, Frankfurt's DAX slipped 0.11 per cent, while Paris CAC gained 0.25 per cent in their early deals. London's FTSE too inched up 0.05 per cent.

US stocks closed mixed Tuesday as rising interest rates hurt stocks that pay big dividends.