Sensex down on skewed sentiment, liquidity risks

The Sensex settled with losses in a choppy session on 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 the expiry of September derivative contracts on Thursday, brokers said.

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

The 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, before closing at 36,542.27.

On a net basis, foreign institutional investors (FIIs) sold shares worth ~12.31 billion on Tuesday, while domestic institutional investors (DIIs) bought equities to the tune of ~22.84 billion, as per provisional data.

“Worries over liquidity issues in NBFC space demoralised investors in domestic markets. Markets also saw 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.