Indian markets witnessed a plunge on Tuesday, February 22, with the Sensex and Nifty indices dropping 1.53%. The drop in the indices was due to the fall in shares of Adani Group, which caused investors to lose confidence in the markets.
The Sensex closed at 59744.98 points, down by 927.74 points, or 1.53%, from the previous trading session’s close of 60672.72
The Nifty also finished at 17554.3, down by 272.40 points, or 1.53%, from the previous trading session’s close of 17826.7
Adani Group shares were the biggest losers on the day. The Adani Enterprises shares dropped by 10.58%, Adani Ports and Special Economic Zone shares fell by 6.19%, and Adani Green Energy shares went down by 5%.
The losses were spread across all sectors. However, banking stocks and industrial stocks, in particular, were impacted by the fall in the Adani Group’s stocks. Private banks, such as Kotak Mahindra Bank, HDFC Bank, Axis Bank, and IndusInd Bank all dropped around 1-2%.
Analysts say that the fall in the Indian markets is due to the global cues and the hawkish tone of the Reserve Bank of India. Markets across the world, including the US, lost ground previously on Monday due to concerns over inflationary pressures.
The Reserve Bank of India in its MPC Minutes of the Meeting signalled that it is not wavering from its inflation target and monetary policy is likely to stay in tightening mode. However, the trajectory remains uncertain. After a higher than estimated January inflation target, RBI is expected to hike interest rates to 7 years high of 6.75% in April.