Sensex plunges by over 1,000 points, heavy sell-off in IT, banking shares

Equities market was falling sharply on Friday during the afternoon trade due to heavy sell-off in IT, PSU Banks, Auto stocks following weak Asian markets on concerns of global recession, dealers said.

At 2.10 p.m., Sensex was down 1050.03 points or 1.75 per cent at 58,883.98, and Nifty was trading 326.56 points or 1.83 per cent lower at 17,550.85.

Mahindra & Mahindra, Tech Mahindra, Ultratech Cement, TCS, Infosys, Wipro were major losers during the afternoon trade on Sensex.

Mumbai:People walk past the Bombay Stock Exchange (BSE) building in Mumbai / IANS

Nifty IT and BSE IT index were down 2.91 per cent and 2.69 per cent respectively. Nifty PSU Bank index was down 2.79 per cent and BSE Auto was down 3.25 per cent.

“Indian equity markets are witnessing some selling pressure after a long period of resilience. Global cues continuously remain weak as there is a sharp surge in the dollar index and US bond yields post US inflation numbers. We may continue to outperform, but we can’t remain in isolation for a long time. Global markets are looking nervous ahead of the FOMC meeting because there is talk of a 100 basis rate hike while a 75 basis rate hike was already discounted,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Asian markets remained weaker on Friday due to growing fears of a global recession after the warnings by the World Bank and the International Monetary Fund.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent. Australian shares were down 0.94 per cent on Friday, while Japan’s Nikkei stock index slipped 1.2 per cent.

Global Recession fears

The world may edge towards the global recession in 2023 as central banks across the world simultaneously hike interest rates to combat persistent inflation, the World Bank said.

The economies of the US, China, and the euro zone, were slowing and a slight hit to the global economy further would lead to recession.

“Technically, Nifty is facing resistance at the 18,100 level and it has slipped below its 20-DMA of 17,700 which may lead to some more selling pressure where 17,470-17,400 is an immediate demand zone then 17,150 is a sacrosanct support level. Bank Nifty is outperforming but yesterday it ended at a day’s low after hitting a fresh all-time high, which is a little disappointing. On the downside, 40,900-40,700 is an immediate demand zone; below this, 40,270 is the next important support level,” Meena added.