Globally, stocks fell from Tokyo to London on concerns that the faster-than-expected recovery in global economy in the face of easy monetary policy may stoke inflation, which will force central banks to tighten monetary policy.
The Nifty50 index ended 3.8 per cent, or 568.20 points, lower at 14,529.15, while the BSE-Sensex closed at 49,099.99, down 3.8 per cent or 1,939.32 points.
In the broader market, though, the sell-off was less intense as the Nifty Midcap 100 and Nifty Smallcap 100 index ended 1.6 and 1.2 per cent lower, respectively.
The volatility in the market was sharply higher as reflected in the fear gauge India VIX surging 23 per cent, the most since December 21.
Here are the major movers in today’s market:
Financials nosedives on yield concerns
Shares of financial services companies plummeted on rising concerns over their cost of borrowing because of the recent spike in government bond yields. Investors were concerned that fears of policy normalisation could stunt the nascent recovery credit growth in the industry. The Nifty Financial Services index slumped 4.9 per cent.
PSU banks sink on concerns treasury income
The Nifty PSU Bank index ended 4 per cent lower as investors were concerned that these banks will report huge losses in their treasury holdings for the March quarter given the recent spike in government bond yields.
Theatre stocks fall on Maharashtra lockdown fear
Shares of PVR and Inox Leisure ended 3.6 per cent and 2.8 per cent lower, respectively, after some media reports suggested that Maharashtra may consider shutting down cinema halls again because of the recent spike in COVID-19 cases.
Over 190 stocks hit 52-week highs
Despite the carnage on Dalal Street, as many as 193 stock registered their new 52-week highs suggesting that overall sentiment among investors still remains quite positive.
What gave sell signal?
Amid the weakness in the broader market, 40 stocks gave sell signal based on MACD indicators including Power Grid Corporation, JSW Steel, Indian Bank, and Avenue Supermarts.
What’s ahead for the market?
Traders aggressively bought the out-of-money put options of the Nifty50 index with 14,300 strike price put option attracting the highest open interest. Traders’ positioning suggested that they are preparing for further weakness in the market next week.
