Power Apart, All Sectors Take A Downfall

The weakening of the global banking sector, along with bloodbath in the domestic automobile and information technology sectors, caused Indian benchmark indices to plummet sharply.

Significant gains in the power and utilities sectors helped indices start the fortnight on a much more optimistic note. The indices then declined, mirroring the deterioration in global indices as Federal Reserve Chair Jerome Powell warned that the central bank will likely need to hike interest rates more than initially predicted in order to control higher inflation. With the collapses of Silicon Valley Bank and Signature Bank as well as tensions at Credit Suisse, the fears of a banking crisis were heightened. The weakening of the global banking industry, along with bloodbath in the domestic automobile and information technology sectors, caused Indian benchmark indices to plummet sharply.

The Sensex constituents IndusInd Bank and State Bank of India were among the most impacted with the sectoral index BSE Bankex showcasing one of the worst performances, tumbling around 6 per cent in just five trading sessions. Being the worst-performing sector, BSE Auto plunged 4.8 per cent during the course of a fortnight, largely due to losses of more than 7 per cent in Mahindra and Mahindra Ltd. Strong demand for cars and utility vehicles enabled Indian automakers to dispatch about 2.90 lakh passenger vehicles, the most ever for the month of February. However, exports of two-wheeler and three-wheeler vehicles from India fell by 35 per cent in February, primarily as a result of weaker domestic currencies relative to the US dollar in the target countries.

With the BSE Information Technology index posting losses of more than 4 per cent, technology stocks also experienced intense selling pressure. The Indian IT industry has undergone major changes in recent months as a result of warnings that a global recession could have a significant impact on the IT businesses. One of them involves prominent companies like TCS and Infosys experiencing attention-grabbing senior leadership turnover. With losses of 0.69 and 0.30 per cent, respectively, BSE Metals and BSE Oil and Gas were among the least impacted sectors. Despite weak market sentiments, BSE Power outperformed all other sectors, surprising investors with gains of 4.83 per cent. 

Due to the consecutive upper circuits, shares of Adani Green Energy and Adani Transmission soared more than 30 per cent over the fortnight, leading the rally in the power sector. The BSE Sensex ended the fortnight 3.71 per cent lower, while Nifty 50 fell 3.45 per cent. Even though outperforming the main indices, BSE Mid-Cap index and BSE Small-Cap index closed 2.67 per cent and 3.30 per cent lower, respectively. While DIIs were the net buyers over the past two weeks, FIIs have turned to being net sellers. The FII outflow was recorded at ₹ 6,183.98 crore whereas DII inflow was recorded at ₹10,445.02 crore in the past 15 days.