BENGALURU: India’s blue-chip indexes posted their worst session in 19 months on Wednesday, led by a slide in top private lender HDFC Bank after its quarterly results.
The blue-chip NSE Nifty 50 shed 2.09% to 21,571.95, while the S&P BSE Sensex lost 2.23% to 71,500.76. Both indexes posted their biggest single-day percentage drop since June 2022.
HDFC Bank, the heaviest-weighted stock on the indexes, tumbled 8.44% in its biggest one-day slide since May 2020, on worries over its stagnant margins.
The pullback in the indexes comes after a recent rally as better-than-feared reports from top IT companies sparked hopes of healthier earnings growth.
“The Nifty has no room for comfort at 22,100 levels, from where it has witnessed profit booking. After the recent IT-driven rally, we think the domestic equities will see some sort of weakness in the next two weeks,” said Sanjiv Bhasin, director at IIFL Securities.
IT drags Indian shares after recent rally; HDFC Bank results eyed
HDFC Bank pulled the bank index and overall financial services index down a little over 4%.
The markets expect either margin pressure or a slowdown in lending growth, a development which can lead to some de-rating in the sector, said Naveen Kulkarni, chief investment officer at Axis Securities PMS.
Twelve of the 13 major sectors logged losses.
Metals fell 3.13% after China, the world’s largest producer and consumer of metals, missed expectations for economic growth in the December quarter.
IT stocks gained 0.64%, boosted by a 3.56% jump in L&T Technology Services after the software services company retained its revenue growth forecast for fiscal 2024.
Analysts expect higher fund flows into IT stocks after their better-than-expected earnings.
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