Slump in financials, war fears hit Street

Nifty, Sensex down 3.3% in market's worst day in more than 20 months

- Dipti Sharma

Dalal Street saw its worst day in more than 20 months on Thursday, as equity benchmarks plunged over 3% in a broad selloff led by financial sector stocks. Sentiment darkened particularly in private banks, both on stock-specific concerns and a wider risk-off mood.

Among the Nifty’s top five losers, three were financials— Shriram Finance (-7.0%), HDFC Bank (-5.1%) and Bajaj Finance (-4.9%). At the centre of the selloff was HDFC Bank, whose shares closed 5% lower after falling 9% to hit a 52-week intraday low. Ina shock leadership change, Atanu Chakraborty stepped down as HDFC Bank chairman on Wednesday, with group veteran Keki Mistry taking over as interim chairman for three months.

The Nifty ended 3.3% down at 23,002.15, its worst single-day decline since its 5.9% plunge on 4 June, 2024. The Sensex also closed 3.3% lower to 74,207.24, its worst show in the same period. The broader market weakened as well, with the Nifty Midcap 100 down 3.2% and the Smallcap 250 falling 2.6%. The selloff, amid a jittery global backdrop, wiped out ₹11.62 lakh crore in investor wealth from BSE-listed companies. Volatility surged, with India Vix rising nearly 22% on Thursday.

Nagaraj Shetti, senior technical research analyst at HDFC Securities, said the overall chart pattern of the Nifty remains weak, with Wednesday's high of 23,862 now seen as a new lower top. “As per this bearish pattern, one may expect further weakness in Nifty in the near term.” He added that a slide below 22,900 could open the next downside target of 22,500 in the near term, with immediate resistance at 23,350.