Heavy selling pressure in tech and growth stocks on US indices amid muted global bond markets
Equity benchmark BSE Sensex tumbled over 450 points in early trade on Tuesday, tracking losses in index-heavyweights HDFC twins, ICICI Bank and Kotak Bank, amid negative cues from global markets. Covid-19 continued to take its toll, with single day spike of 3,29,942 infections and 3,876 fatalities according to latest government data.
The rupee also fell 13 paise to 73.48 against the dollar in early trade.
The 30-share index was trading 470.10 points or 0.95 per cent lower at 49,032.31 in initial deals, while the broader NSE Nifty slumped 145.80 points or 0.98 per cent to 14,796.55.
The top loser in the Sensex pack was Kotak Bank, shedding over 2 per cent, followed by HDFC, TCS, ICICI Bank, Bajaj Auto, Tech Mahindra, M&M and Maruti, while Sun Pharma, NTPC, ONGC, ITC, Reliance Industries and UltraTech Cement were among gainers.
Foreign institutional investors (FIIs) were net buyers, purchasing shares worth Rs 583.69 crore on Monday, according to provisional exchange data.
According to Binod Modi, Head of Strategy at Reliance Securities, domestic equities do not look to be positive as of now on weak global cues.
“US indices, especially S&P 500 and Nasdaq, fell sharply mainly on account of heavy selling pressure in high profile technology and growth stocks. While US equities have been gaining momentum consistently supported by robust March quarter corporate earnings and loose monetary policy of the Federal Reserve, the bond market has been broadly muted in the last one month.
This started weighing on investors’ sentiments as any surge in bond yield will make valuations of technology or growth stocks quite expensive, he noted.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a negative note in mid-session deals, while Brent crude was trading 0.73 per cent lower at USD 67.82 per barrel.