Markets in bear hug as HDFC twins tank

- BSE Sensex tanks 694.96 pts or 1.13% to 61,054.29

- During the day, Sensex plunged 747.08 pts or 1.20% to 61,002.17

- NSE Nifty fell 186.80 pts or 1.02% to 18,069 pts

- IndusInd Bank, Tata Steel, Kotak Mahindra Bank, M&M laggards

- Titan, UltraTech Cement, Maruti, Nestle, ITC and L&T among gainers

Hyderabad: The domestic stock markets slipped into a bear hug as multiple factors on Thursday dampened the investor sentiment on Dalal Street. Heavy selling in HDFC twins amid increased concerns over funds outflow after the merger. It’s estimated that post-merger may result in funds outflow to the tune of $200million. Further, the weaker global cues put more pressure on markets. ECB raised rates by 25 bps and signaled the need for further rate hikes. Wall Street has witnessed prolonged selling pressure due to apprehensions in the banking sector.

Benchmark indices Sensex and Nifty declined more than one per cent at close on Friday due to a heavy sell-off in index major HDFC twins, which contributed 653points to overall loss of 695 points to BSE Sensex.

The 30-share BSE Sensex tanked 694.96 points or 1.13 per cent to settle at 61,054.29 as 20 of its components declined and 10 advanced. During the day, it plunged 747.08 points or 1.20 per cent to 61,002.17. The broader NSE Nifty fell 186.80 points or 1.02 per cent to end at 18,069 with 30 of its constituents declining and 19 closing with gains.

Among the Sensex firms, HDFC Bank tumbled 5.80 per cent followed by HDFC which plummeted 5.57 per cent. Both the stocks fell sharply amid reports that the merged HDFC entity could see significant outflows.

“The Indian market was dragged down by heavy selling in HDFC twins on fears of post-merger fund outflow. In addition, the cues from global peers were lacklustre as the ECB raised rates by 25 bps and signalled the need for further rate hikes. Wall Street has witnessed prolonged selling pressure due to apprehensions in the banking sector about the strength of regional banks," said Vinod Nair, Head of Research at Geojit Financial Services.

“Markets were under a bear hug on the back of massive profit-taking amid sell-off in HDFC twins, US banking woes and weak Wall Street cues. The negative takeaway was that Nifty Bank tumbled 2.3 per cent on reports that merger of HDFC twins may result in slight outflows of $150 to 200 million,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.