SENSEX, NIFTY50 fall for a third straight session; Mid, small-cap indices fall 1%

The Indian equity benchmarks declined for a third straight session on Wednesday, January 21, amid heightened volatility as rising geopolitical tensions continued to dampen the investors' sentiment. The SENSEX traded in a band of 1,283 points and NIFTY50 index touched over three-month low of 24,920 and a high of 25,301. But markets staged a recovery in afternoon trading owing to short covering as markets entered oversold zone, analysts said.

The SENSEX ended 271 points lower at 81,910 and NIFTY50 index declined 75 points to close at 25,157.

Overnight, stocks slumped on Wall Street on Tuesday after President Donald Trump threatened to hit eight European countries with new tariffs as tensions escalate over his attempts to assert American control over Greenland.

Dow Jones falling 1.76%, the S&P 500 index dropped 2.06%, and the Nasdaq declined 2.39

European markets were trading lower ahead of President Trump's address to world leaders at the World Economic Forum (WEF) at Davos. Germany's DAX declined 0.6%, France's CAC40 index fell 0.21% and England's FTSE100 index slipped 0.1%.

Back home, volatility spiked for a second straight session as India VIX, also known as the measure of expected volatility in the market, surged 8.24% to 13.78.

Thirteen of 15 sector gauges compiled by the National Stock Exchange ended lower led by the NIFTY Consumer Durables index's 1.66% fall. NIFTY Bank, Financial Services, FMCG, Pharma, PSU Bank, Realty and Healthcare also fell between 0.6%-1%.

On the flipside, metal and oil & gas shares witnessed buying interest.

Broader markets underperformed their larger peers as NIFTY Midcap 100 index dropped 1.14% and NIFTY Smallcap 100 index plunged 0.9%.

ICICI Bank was top loser in the NIFTY50 index, the stock fell 2.1% to close at ₹1,347. Trent, Tata Consumer Products, Bharat Electronics, HDFC Life, Axis Bank, HDFC Bank and Larsen & Toubro also fell between 1%-2%.

On the flipside, Eternal was top gainer in the NIFTY50 index, the stock ended 5% higher ahead of its earnings announcement.

InterGlobe Aviation, Max Healthcare, Hindalco, JSW Steel, Grasim and Ultratech Cement also rose between 1%-1.4%.

The overall market breadth was negative as negative as 2,831 shares ended lower while 1,437 closed higher on the BSE.