Sensex, Nifty dip by 1%: What has triggered this sell-off?

The BSE Sensex opened at 67,080.18, down 517 points compared to Monday’s (September 18) close of 67,596.84. The market was closed on September 19 due to a festival holiday. The 30-share index, however, tanked below the 67,000 mark and was trading at 66,821.53 in the afternoon trades. The NSE’s Nifty dropped 1.11 per cent to 19,910.2 in afternoon trades, after opening at 19,980.75 compared to the previous close of 20,133.30.

Why has the market fallen?

On Wednesday, Sensex and Nifty opened lower amid caution among investors before the US Federal Reserve’s meeting outcome, in which it is widely expected to maintain status-quo.

“The US Fed is expected to pause its interest-rate hike for the second time this year following a slowing in inflation, though the focus will be on the central bank’s forward guidance. Jerome Powell (Federal Reserve Chair) has signalled that Fed leaders would prefer to wait to evaluate the impact of past increases on the economy as they near the end of their rate-hiking campaign,” CR Forex Advisors Managing Director Amit Pabari said in a note.

The drag on the Sensex is HDFC Bank, which crashed around 4 per cent on concerns over its asset quality after its merger with HDFC Ltd. The lender had organised an analyst meet to discuss the impact on financials due to the merger, Macquarie said in a note issued after the analyst meet.

“As on July 1, 2023, erstwhile HDFC real estate NPL (non-performing loan) book was 6.7 per cent higher than the March 31, 2023 reported NPL of 2.9 per cent. This is a combination of accounts recognised as per the bank’s more prudent standards and a denominator effect as loans are running off,” Macquarie said, adding that this was a negative surprise.

Who are the top gainers?

Among the NSE companies, the top gainers included Power Grid Corporation, Coal India, NTPC Bajaj Auto and Bajaj Finance.

Which are the companies that have lost the most?

The companies that dropped the most are HDFC Bank, JSW Steel, IndusInd Bank, Reliance Industries and BPCL.