Investor wealth drops ₹2 tn; RIL, Infosys, HUL lead losses

The Nifty 50 fell 1.17%, or 234.15 points, to 19745 points, while the Sensex corrected by 1.31% or 887.64 points to 66,684.26 points. The fall would have been steeper had it not been for banks, which bucked the trend with the 12-member Bank Nifty hitting a fresh 52-week high of 46369.50.

Infosys, Tech Mahindra Ltd, Hindustan Unilever, HCL Technologies Ltd, Wipro Ltd and Reliance Industries led Friday’s losses, falling between 3% and 8% on both exchanges. Infosys, which plunged 8.13% to ₹1331.60 after slashing its revenue guidance for FY24, eroded investor wealth by a whopping ₹48,931 crore, accounting for a fourth of Friday’s overall wealth loss of ₹1.96 trillion.

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The other big loser was RIL, which shed ₹54,872 crore. Shares of the company, which has the second-highest weighting on Nifty after HDFC Bank, declined by 3% to ₹2538.75. The Nifty, which was barely eight points away from the 20,000-mark, could encounter some more volatility, depending on how markets react to the US Federal Reserve and European Central Bank policy meetings next week, and the earnings of large companies like Reliance Industries.

“We might see some more volatility going forward, but this isn’t a market to short,” said Abhilash Pagaria, quant research head at Nuvama. “Rather, it’s a buy-on-dips one. Earnings and other global events would influence the direction (of markets).”

RIL’s Nifty weight stood at 10.03% on 20 July against HDFC Bank’s 14.26%. Pagaria added that with the demerger of Jio Financial Services complete, investors took some profits “off the table” before its earnings announcement.

Infosys, Reliance, HDFC Bank and ICICI Bank were the top traded stocks on NSE, with Infosys alone witnessing traded turnover of ₹6073 crore.

RIL was the most actively traded stock on the futures and options segment, with open positions (outstanding futures contracts) rising by a whopping 137% to 139,000 contracts (one contract equals 250 shares) from 58694 contracts a day earlier.

The build-up in RIL futures indicates a bearish build-up ahead of the results. Being an index heavyweight, RIL can set the course for the market, said analysts.

With the outlook for the IT sector getting clouded by Infosys slashing its guidance, Siddhartha Khemka, retail head of research at Motilal Oswal, expects fund allocations to the banking sector to increase at the cost of the IT pack.

“There will be a divergence with banks outperforming the IT sector,” Khemka said. “All eyes will be on the US Fed and ECB policy meetings next week. Investors would also take cues from various macro data that would be released. With the result season picking up pace, we expect a lot of stock-specific action and provide direction to domestic equities in the coming week. Apart from Index heavyweight Reliance, the banking sector is also likely to be in focus as ICICI Bank and Kotak Bank would announce results over the weekend.”

The Nifty gainers were Larsen & Toubro Ltd which rose almost 4% after its board decided to discuss ba buyback, State Bank of India and Kotak Mahindra Bank Ltd, which gained almost a percent each.

Updated: 22 Jul 2023, 12:37 AM IST