Sensex tanks 561.05 points in early trade; Nifty plunges to 21,406.35

Sensex on Thursday tanked 561.05 points to 70,939.71 in early trade and Nifty plunged 165.6 points to 21,406.35. Investors continued to cash in profits following the recent impressive rally, with the mood further dampened by fresh foreign fund outflows. The 30-share BSE Sensex dropped by 561.05 points to reach 70,939.71, while the Nifty saw a plunge of 165.6 points to 21,406.35.

The significant market downturn follows a recent record-breaking rally, with the BSE benchmark hitting an all-time high of 73,427.59 and the Nifty reaching its lifetime peak of 22,124.15 on Tuesday.

Gainers and losers

Laggards among Sensex firms included Power Grid, Asian Paints, Wipro, HDFC Bank, HCL Technologies, IndusInd Bank, NTPC, and JSW Steel. On the positive side, gainers included Axis Bank, Bharti Airtel, UltraTech Cement, Tata Motors, and Reliance Industries.

In Asian markets, Shanghai observed a decline, while Seoul, Tokyo, and Hong Kong traded positively. The US markets closed lower on Wednesday. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,578.13 crore on Wednesday, contributing to the market downturn.

The sell-off was triggered partly by HDFC Bank's results falling below expectations. The broader context suggests a correction in emerging markets, as seen in Taiwan and Korea, driven by foreign portfolio investor (FPI) outflows. The FPI sell-off in India on Wednesday amounted to a substantial Rs 10,578 crore.

Analysts anticipate a potential sell-off by FPIs amidst rising bond yields in the US, but this may be offset by domestic institutional investors (DII) buying in fairly valued large caps with growth potential. On Wednesday, the BSE benchmark experienced a sharp decline of 1,628.01 points (2.23 per cent) to settle at 71,500.76, and the Nifty dropped by 460.35 points (2.09 per cent) to settle at 21,571.95.

In the global oil market, Brent crude rose by 0.26 per cent to USD 78.08 per barrel.

(With PTI inputs)