Massive selling by foreign portfolio investors (FPIs) ahead of the crucial federal open market committee (FOMC) meeting in the US led to sharp decline in Sensex and Nifty. 

BSE Sensex fell 636 points or 1.04 per cent to close at 60,657 and NSE Nifty index declined 202 points or 1.04 per cent at 18,030. FPIs sold stocks worth ₹2,620 crore on Wednesday in the cash segment. The domestic institutional investors (DIIs) net purchased stocks worth ₹773 crore, as per provisional figures.

In the index futures, the FPIs were net sellers to the tune of Rs ₹2,604 crore and in the stock futures net sellers worth ₹2,101 crore. 

Fed meeting

According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, investors offloaded their holdings ahead of the outcome of the US FOMC minutes meeting that would indicate the signs of interest rate hike trajectory going ahead. “Other global macroeconomic concerns like the Chinese slowdown due to higher Covid cases, sliding crude oil prices, and the persisting geo-political tension continue to weigh on investors’ minds. There could be heightened volatility in the coming sessions due to rising uncertainty,” he said. 

Asian indices had a mixed day with most tracking the overnight Wall Street losses, while China’s markets rose as they celebrated the government measures to support struggling industries.

Japan’s Nikkei declined to its lowest level in nearly 10 months in the first trading session of 2023 as the yen strengthened against the dollar. The Nikkei fell 1.45 per cent to its lowest close since March 15. The broader Topix lost 1.25 per cent. 

India would be following global cues until budget announcement on February 1, analysts said. 

Broad-based selling

The selling was broad-based, with the BSE Midcap declining 0.97 per cent and the Smallcap slipping 0.79 per cent.

Among sectoral indices, BSE Metal was the biggest loser by 2.83 per cent, followed by BSE Realty (1.99 per cent), BSE Utilities (1.74 per cent), BSE Energy (1.70 per cent), BSE Oil & Gas (1.52 per cent) and BSE Power (1.51 per cent).

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