FIRST TRADE: Sensex slips over 250 pts; Nifty below 21,200; Axis Bank plunges post-Q3 results

Stock market today: Domestic equity indices Sensex and Nifty 50 on Wednesday (January 24) began Wednesday’s session in the red, extending the previous day’s losses, amid persistent weakness in the banking pack led by Axis Bank after the private sector lender posted a quarterly net interest income that fell short of analysts’ estimates. The Sensex was down 148.78 points at 70,221.77 and NSE Nifty declined 29.95 points at 21,208.85. 

“The valuations in the broader market had become excessive and unsustainable as pointed out many times recently. The trigger for the correction came mainly from the sustained selling by FIIs who have sold equity worth Rs 27,830 crore during the last five days. Some news and rumours also contributed to the selling in the market. There is news that SEBI is tightening the ultimate beneficiary norms for FPIs starting February 1. This might have triggered some FPI selling. Also, there is a rumour floating around that the finance minister may tweak the LTCG tax taking away the advantages investors are enjoying now. Such rumours are normal during the Budget time,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Selling by FPIs and more corrections in the broader market are likely and investors may wait for the market to stabilise, said Vijayakumar, adding: “Safety now is in fairly priced large caps.”

Among broader indices, while Nifty Midcap 100 was in the red, its smallcap counterpart traded flat with a positive bias. The high-beta Nifty Bank was down nearly half a per cent at 44,804.2. 

(This story will be updated shortly)