- Sensex dropped 400.59 points to 73,452.31 by midday, down 0.54% from close
- Nifty Smallcap 100 and Midcap 100 declined sharply by 2.55% and 1.86% respectively
- Rising crude prices near $110 and higher volatility weighed on market sentiment
Indian equities gave up a strong morning rally and slipped into the red by midday on Wednesday. At 12:29 pm, the Sensex was at 73,452.31, down 400.59 points or 0.54% from the previous close. That is a drop of 1,229.88 points, or 1.65%, from its intraday high of 74,682.19. The Nifty 50 was at 22,733.20, down 155.75 points or 0.68%, and 387.70 points below its high of 23,120.90.
The broader market took a heavier hit, with the Nifty Smallcap 100 fell 483.55 points, or 2.55%, to 18,452.20. The Nifty Midcap 100 lost 1,089.10 points, or 1.86%, to 57,398.85. Early gains in IT stocks have not been enough to offset selling elsewhere.
Reliance Industries, one of the heaviest stocks in both benchmark indices, was a key driver of the morning rally as its digital arm's IPO opened for subscription. RIL touched an intraday high of Rs 1,234.30, up 2.68% from Tuesday's close. By around 10:20 am, however, it had cooled to Rs 1,214.60, a gain of just 1.05% over its previous close.
Here's a look at the three broad factors pressuring the markets.
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1. Mid and smallcap selling spreads to benchmarks
Weakness in the broader market, which started early in the session, has deepened and pulled the headline indices lower. Selling was concentrated in power, cables and defence-related stocks, and Biocon and Swiggy fell to 52-week lows. The smallcap index is now down more than four times as much as the Nifty in percentage terms.
2. Losses in auto, realty and select heavyweights
Auto and realty stocks are weighing on the market, and Bajaj Finance, Eicher Motors and Eternal are among the biggest losers in the Nifty 50. Bajaj Finance has stayed under pressure despite reporting 23.6% year-on-year growth in net interest income for the September quarter.
At 12:37 pm, Bajaj Finance was trading 3.14% lower at Rs 927.3, whereas Eicher Motors was down 3.11% at Rs 7,120.5, and Eternal plunged 2.75% to Rs 311.4.
3. Oil near $110 and rising volatility
High crude prices remain a concern for India, which imports most of its oil. Brent December futures traded 1.14% higher at about $110 a barrel, on worries over Red Sea shipping and risks to Saudi oil facilities. Investor nervousness is also visible in the fear gauge, with India VIX jumped 8.5% to 16.03, signalling expectations of sharper swings in the near term.
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