The domestic benchmark indices not only extended their losing run to the fourth day on Wednesday but also turned negative for 2021. Both Sensex and Nifty closed nearly 2 per cent lower on the back of weak global cues and FII outflows. Meanwhile, investors also chose to book profits ahead of the Union Budget on Monday, February 1.
Analysts said high valuations also spurred profit taking but believe that such profit-taking is healthy and desirable. While the Q3 earnings season has been largely in line with expectations, analysts believe this was priced in and going ahead, they are concerned about lower margins.
The BSE barometer Sensex plunged 938 points to 47,410 while its NSE counterpart Nifty slipped below the 14,000 mark to end at 13,968, down 271 points.
The volatility remained elevated ahead of the January F&O expiry on Thursday. India VIX jumped 4.93 per cent to 24.39 level.
In the 30-pack Sensex, only six stocks ended in the green. Axis Bank fell over 4 per cent ahead of its December quarter numbers and was the top index loser, followed by Titan, IndusInd Bank, HDFC Bank and Dr Reddy's that shed 4 per cent each. on the other hand, Tech Mahindra and ITC were the top gainers.
The broader market trend was mixed with Nifty Midcap 100 and Nifty 500 indices down 1.58 per cent and 1.68 per cent, respectively, while Nifty Smallcap index added 0.15 per cent.
Sectorally, only the Nifty FMCG index rose while all other indices ended in the red, with private banks and financials leading the losers.
In stock-specific developments, shares of Reliance Industries fell for the third day today, down over 2 per cent. In the three days, it has shed 10 per cent. While RIL's Q3 PAT jumped 12.5 per cent yearly, analysts were concerned about the lack of transparency levels across businesses.
Meanwhile, shares of Rane (Madras) rallied 14 per cent after a solid performance in the December quarter. The firm reported a consolidated net profit of Rs 5.50 crore in the December quarter on the back of strong revenue growth against a loss of Rs 7.20 crore in the same period last year.
Meanwhile, in other news, an ICMR study on Covaxin showed a comparable neutralization activity of the vaccinated individuals against UK-variant strain.
Lastly, an update on the global markets
Europe's share indexes opened lower on Wednesday, while investors focused on the U.S Federal Reserve meeting and US tech giants' earnings. The STOXX 600 was down around 0.3% while London's FTSE 100 was down 0.2%. Germany's DAX was down 0.5%. In the Asian session, shares were hurt by some profit-taking, as investors grew wary of stretched valuations.
Futures on the S&P 500 Index decreased 0.2%, indicating a flat-to-negative start for Wall Street indices.