Sensex declines by 304 points as HDFC twins, Infosys succumb to profit taking

Mumbai: Benchmark BSE Sensex reversed its early gains to close lower by 304 points on Wednesday due to profit-taking in banking, financials and select IT stocks after a recent surge.

The 30-share BSE barometer opened higher and rose further to 58,416.56 in line with gains in Asian shares.

However, profit-taking by investors in recent winners and lackadaisical buying at higher levels dragged down the index which tanked over 420 points to hit the day's low of 57,568.59 points in the second half.

The Sensex finally closed lower by 304.48 points or 0.53 per cent to settle at 57,684.82. During the day, it tanked 420.71 points or 0.72 per cent to 57,568.59.

The broader NSE Nifty dipped 69.85 points or 0.4 per cent to finish at 17,245.65 with 29 of its stocks ending in red.

The key indices had gained over 1 per cent in the previous trade.

Among Sensex stocks, HDFC fell the most by 2.36 per cent.

Kotak Mahindra Bank lost 2.25 per cent, HDFC Bank fell by 1.26 per cent, Bharti Airtel by 1.97 per cent, Sun Pharma by 1.46 per cent, Maruti Suzuki India by 1.54 per cent, Mahindra & Mahindra by 1.33 per cent, Asian Paints by 1.16 per cent and Infosys by 0.86 per cent.

"Domestic equity market is stuck in a range for the last couple of days amid increasing volatility. Despite opening in the green, follow up buying was missing at higher levels. This led to downward pressure in the second half of the day," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Among major gainers, Dr Reddy's Laboratories rose by 2.31 per cent, Tata Steel by 2.15 per cent, and ITC by 0.86 per cent.

"After the recent rally, market is getting cautious. Volatility is back due to inflationary pressures triggered by supply constraints. While consistently rising input cost & fall in demand due to surge in Covid cases in parts of the world, war & high commodity prices are impacting earnings growth which can lead to downgrade in outlook," said Vinod Nair, Head of Research at Geojit Financial Services.

In the broader market, the BSE midcap index gained 0.39 per cent, while smallcap gauge dipped marginally by 0.02 per cent.

Among BSE sectoral indices, banking (down 0.81 per cent), finance (0.74 per cent), auto (0.72 per cent) and industrials (0.56 per cent) were the biggest laggards.

"The move in the index so far shows consolidation after two weeks of rebound and it's healthy. However, the prevailing uncertainty on the global front combined with lack of any domestic trigger is keeping the participants on their toes," according to Ajit Mishra, VP - Research, Religare Broking Ltd.

In the previous trade, the BSE Sensex closed up by 696.81 points or 1.22 per cent at 57,989.30. The Nifty climbed 197.90 points or 1.16 per cent to finish at 17,315.50.

Equity exchanges in Tokyo, Hong Kong, Seoul and Shanghai ended with gains after the US stocks ended largely higher in the overnight session. European stocks were also higher in mid-session deals.

Meanwhile, international oil benchmark Brent crude jumped 2.12 per cent to USD 117.8 per barrel.

Foreign institutional investors (FIIs) were net buyers as they bought shares worth Rs 384.48 crore on Tuesday, according to stock exchange data.