RBI remark sends indices into a tailspin
Benchmark stock indices Sensex and Nifty tumbled on Tuesday due to heavy selling in Reliance Industries, ICICI Bank and SBI amid a mixed trend in global markets. Reliance Industries was the top loser in the Sensex pack, shedding 2.51 per cent.
Indian equities open negative; Sensex, Nifty indices down 1.5% each
Valuation Disconnect
- BSE Sensex ended 396.34 pts lower at 60,322.37
- NSE Nifty fell 110.25 pts to 17,999.20
- RBI observed that equity market valuations are stretched
- RIL top loser in the Sensex pack
- SBI, UltraTech Cement, IndusInd Bank, NTPC and Sun Pharma in the red
- Maruti, M&M, Tech Mahindra, Bajaj Finance, Infosys and Bajaj Finserv were gainers
Mumbai: Benchmark stock indices Sensex and Nifty tumbled on Tuesday due to heavy selling in Reliance Industries, ICICI Bank and SBI amid a mixed trend in global markets. Reliance Industries was the top loser in the Sensex pack, shedding 2.51 per cent. Among other losers, SBI sank 2.31 per cent, Ultratech Cement by 2.2 per cent, NTPC by 2.08 per cent and IndusInd by 1.8 per cent. The 30-share Sensex declined by 396.34 points or 0.65 per cent to close at 60,322.37 after a volatile trade. The index hit a high of 60,802.79 points and a low of 60,199.56 in day trade.
The 50-issue Nifty tumbled 110.25 points or 0.61 per cent to end below the 18,000 level at 17,999.20 as 37 of its stocks declined. "The domestic market started trading between gains and losses before slipping into deep red with heavy selling in banking and pharma stocks. The RBI's statement that equity market valuations are stretched added to the pressure," said Vinod Nair, head (research) at Geojit Financial Services. Arijit Malakar, head (research-retail) of Ashika Stock Broking, adds that "RBI and other global brokerages have been cautious about Indian equity's prospects, thus highlighting the risk to investment returns due to stretched valuation and elevated inflation." "As Investors try to figure out the valuation disconnect between the recently listed digital entities versus their traditional counterparts who built distribution reach offline, the euphoria around the former seems to have set minds thinking. As the street worries on inflationary pressures leading to companies raising prices and their consequent impact on demand, we saw a highly volatile trading session today," said S Ranganathan, head (research) at LKP Securities.
