Sensex Plunges 694.96 Points, HDFC Twins Dive On MSCI Rejig Fears

Benchmark indices fell sharply in trade today with HDFC and HDFC Bank dropping 5 per cent and 6 per cent respectively, dragging domestic indexes lower. The Sensex ended the day lower by a whopping 694.96 points, while the Nifty dropped 188.05 points in trade.

The HDFC twins tanked on suggestions made by a Nuvama report that following the merger of the private lenders, MSCI "intends to add HDFC BANK to the large-cap segment of MSCI Global Standard Indexes." This would not lead to any incremental inflows, instead would result in outflows of up to $200 million.

Among the stocks that fell in trade apart from HDFC twins, included stocks like IndusInd Bank, Hindalco, and UPL. Manappuran saw its shares dive by 12% after reports of raids by the Enforcement Directorate.

"While the overall market structure remains positive, expect Nifty to consolidate in the near term on the back of subdued global cues and profit booking in index heavyweights. Next week market would also take cues from inflation, state election outcome, and ongoing earning season", said Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd.

A total of 21 stocks advanced and 29 declined on Nifty while 10 stocks advanced and 20 declined on Sensex during the trade on Friday at closing.

All the major indices, including the mid-cap and small-cap indexes, were bleeding in red except India vix. Among sectoral indexes, the auto index and FMCG index were the only ones that ended upward by 0.40 per cent and 0.27 per cent.

Titan, Maruti Suzuki, Ultratech Cement Nestle, and ITc were top gainers on Nifty to end 2 to 2.5 per cent above on both the indexes. While, the stocks of HDFC, HDFC Bank, and IndusInd Bank tanked the most by nearly 4 to 6 per cent dragging down the bourses at closing.

Tata Steel, Mahindra & Mahindra, and Infosys stock fell sharply on Sensex by nearly 1.5 to 2.5 per cent.