Market Watch: Market Watch: Sector rotation leads to profit taking in energy stocks

Welcome to ETMarkets Watch, your daily recap of the day on Dalal Street. I am Nikhil Agarwal.

Volatility continued to weigh on markets on Wednesday as jittery investors stayed away for another session, pushing benchmarks lower for the fourth day in a row.

D-Street is concerned about the Federal Reserve’s aggressive policy tightening amid stubbornly high inflation and its domino effect in India. Expectations that the US central bank could raise interest rates by 75 basis points later in the day also heightened fears of an impending recession.

Led by Reliance Industries and selling in the IT, Metal, Oil & Gas and FMCG packs, the 30-pack Sensex shares fell 152.18 points to end a lackluster session at 52,541. Its broader counterpart, Nifty50, lost 40 points to settle at 15,692.15.

Broader markets outperformed, with mid and small cap indices ending with gains of 0.5% each. Among the sectors, autos, capital goods and healthcare ended with gains while metals, oil & gas and power ended with losses.

ONGC was the biggest loser in the Nifty50 pack with a drop of more than 3%. NTPC, Infosys, Reliance, Wipro and HUL also settled into the red. On the other hand, the Bajaj twins were the top gainers in today’s session, rising 4% and 2%. Tata Steel, Tata Motors, Hero Motocorp and Grasim also finished with gains. Dependency fell more than 1% after CLSA said Bharti Airtel outperformed Jio in the fourth quarter in terms of revenue share gains.

Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, said there was a lot of sector rotation with profit booking in energy stocks, while battered sectors like pharmaceuticals and banking have experienced some buying interest.

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