Sensex drops 1000 points to 72,163; Nifty falls below 22,000

On Wednesday, Indian shares experienced a significant decline, with the Sensex plummeting by 1000 points to 72,163, and the Nifty dropping below the 22,000 mark. The slide was attributed to the poor quarterly results of top private lender HDFC Bank, which led to a drag on high-weightage financials. \

As of 10:04 a.m. IST, the NSE Nifty 50 shed 1.11%, reaching 21,789.15 points, while the S&P BSE Sensex lost 1.16%, reaching 72,281.77. HDFC Bank, the highest weighted stock on the benchmark indexes, witnessed a significant drop of 7.10%, its highest single-session percentage fall since May 4, 2020, following stagnant margins for the second consecutive quarter.

Analysts at Kotak Institutional Equities expressed concerns about HDFC Bank's performance, stating that the "operating profit growth drivers appear to be less sustainable," and the bank reported higher provisions. The deterioration in the underlying deposit growth environment and slower-than-expected drivers for net interest margin expansion further contributed to the decline in HDFC Bank's shares.

This drop also had a cascading effect on the bank index and the financial services index, both recording about a 2.5% decrease. With eleven of the thirteen major sectors facing losses, market experts anticipate a period of weakness in domestic equities, emphasizing that everything positive, including earnings and macroeconomic data, has already been priced in.