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PSU Bank, Metal Stocks Contribute In 555 Pts Sensex Fall

The Indian equity markets turned negative in the afternoon trade after opening positive on Wednesday. Declines in Metal and PSU Banking stocks dragged the markets the most in the intraday session.

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After opening on a firm note, the Dalal-Street witnessed a bloodbath in the afternoon session due to profit booking from higher levels on Wednesday, October 6. Negative cues from global peers triggered the profit booking in the markets, said experts.

Vinod Nair, Head of Research, Geojit Financial Services, said, "Spike in crude prices is spooking the Indian market while inflation is affecting US bond yields."

The Sensex ended the intraday session lower by 555.15 points at 59,189.73, and the Nifty was down 176.30 points at 17,646. The BSE index ended the session with just three advances, while 27 scrips in the pack ended lower. IndusInd Bank was the top index loser, down over three per cent, while Tata Steel, Bajaj Auto, and HCL Tech dipped over two per cent each. However, on the flipside, shares of HDFC Bank closed higher by a per cent after the bank announced that its retail loans surged by 5.5 per cent in Q2.

Due to broad based selling, all sectors turned red in the closing trade on Wednesday. The Nifty Metal index shed about three per cent, while the IT, Auto, and PSU Bank declined over a per cent each. NALCO and Vedanta were the top drags in the metal space as the stocks fell over five and three per cent, respectively.

In-line with the headline indices, the BSE Midcap also closed lower by 1.22 per cent, while the BSE Smallcap index was down 0.55 per cent. In the Midcap space, Aditya Birla Fashion, IDBI Bank, and Adani Power were the top laggards as the stocks fell five per cent each in the day's trade.

In the near-term, experts are of a view that the correction in the markets currently are healthy and it cannot be ruled out after a long journey that we have witnessed in the last 12 months. However, the Moody's upgrade on India's rating outlook to stable from negative is a big positive for the country.

Suvodeep Rakshit, Senior Economist, Kotak Institutional Equities, said, "Moody’s outlook upgrade to stable reinforces the fact that the risks for the financial sector are lower now along with visibility of sustained growth and gradual fiscal consolidation."