Sensex tanks 1200 points, Nifty slips below 14700; IT, Banks decline the most

Dalal street observed high volatility on Monday, February 22 and it turned out to be a stressful day for the market participants. Markets continued to fall for a fifth straight session.  All major sectors underperformed as sellers continued to dominate the market.  Sensex slipped 1200 points in the intraday trade and Nifty-50 was down over two per cent.

The 30-share pack Sensex closed at 49,744.32, down by 2.25 per cent, or 1,145 points. Nifty closed lower by 306 points, or 2.04 per cent, at 14,675.70. The Nifty Bank index declined heavily in the early trade as IndusInd Bank and Axis Bank witnessed a loss of over four per cent each.

 All sectors declined except for Nifty Metal. Stocks of companies like JSW Steel and Tata Steel added over two per cent each and also remained the top gainers throughout the day. M&M, ITC, and Tech Mahindra contributed to the list of stocks of top losers after sinking over four per cent each.  

Fear of slowdown in economic activities coupled with the steadily rising Covid cases has affected the markets and led to volatility, experts said. On the other hand, Global markets declining on the concerns of inflation as the commodities rise and the US 10-year bond yield scaling heights also made the investors cautious.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, on rising Covid cases said, "The escalation in COVID cases in Maharashtra is emerging as a cause of concern. These concerns have impacted FPI flows to the market which, though positive, appears to be slowing down. Clear trends on these concerns have to be watched."  

Also, the FPI (Foreign Portfolio Investors) restricted themselves considering the negative factors affecting the markets that contributed to the overall decline in inflows. On February 19, FPIs bought shares worth Rs 118.75 crore (net). 

Vinod Nair, Head of Research at Geojit Financial Services, said, “FPI inflows, which was leading the rally, slowed down due to global vulnerabilities from rising bond yield and inflation. However, this is a buy on dip market, a short-term correction will trigger new buying, as economic fundamentals have improved, with more focus on industrial and cyclicals.” 

Ruchit Purohit

BW Reporters The author is a Trainee Journalist at BW Businessworld based in Mumbai. He tracks the Markets and related news.