Foreign institutional investors (FIIs) were the net sellers of securities worth of ₹1,877.84 crore, while domestic institutional investors (DIIs) also sold securities for a net total of ₹2.23 crore.
The decline was triggered by a sell-off in global markets after Fitch downgraded the US credit rating from AAA to AA+. The downgrade was due to concerns about the US government’s rising debt levels and the potential for a recession.
The surge in the US 10-year bond rate, which topped 4% for the first time since 2011, also alarmed investors. Rising bond yields are interpreted as an indication that investors are growing more risk-averse.
PSU banks, metals, and auto stocks were the biggest losers on Wednesday, while FMCG and healthcare stocks bucked the trend and showed resilience.
The S&P BSE Sensex fell 676 points, or 1.02%, to close at 65,782, while the Nifty 50 index lost 207 points, or 1.05%, to close at 19,526. The broader market lagged behind the main indices. The S&P BSE Mid-Cap index fell 1.39%, while the S&P BSE Small-Cap index down 1.18%.
Major drags included Tata Motors (down 3.19%), Bajaj Finserv (down 2.89%), HDFC Bank (down 1.25%), and Reliance Industries (down 1.05%). Market breadth was negative. On the BSE, 1,176 shares climbed while 2,428 declined. 134 shares remained unchanged.
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services said, “Domestic Equities saw downward pressure following the global peers amid weak economic data and a downgrade in US sovereign credit rating. Nifty opened lower and witnessed profit booking throughout the session to close with a loss of 219 points (-1.1%) at 19514. India’s VIX sharply rose by 10% indicating volatility in the market. The broader market too faced the burnt with Nifty midcap 100 and small cap 100 down more than 1%.”
“All sectors ended in red with PSU Bank, Metals, and Auto being the top losers. Globally markets including Indian Equities came under pressure after Fitch Ratings downgraded the U.S. sovereign credit rating from AAA to +AA. Further, weak economic data from the United States, Eurozone, and China dampened investors’ sentiments. However, strong GST collection in the month of July and a surge in domestic core output data kept the downside in check. Going ahead, markets could remain subdued given the gloomy global environment. Stock-specific action is likely to continue in the market with the ongoing result season.” he added
Download The Mint News App to get Daily Market Updates.
Updated: 02 Aug 2023, 06:11 PM IST