Stocks slide on selling overload

Mumbai: The BSE Sensex slumped 456 points while the NSE Nifty closed below the 18,300-level on Wednesday as market participants pared exposure to overbought counters for the second straight session.

Midcap and smallcap stocks too saw heavy selling amid concerns over frothy valuations, traders said. The 30-share BSE Sensex ended 456.09 points or 0.74 per cent lower at 61,259.96 points. Similarly, the NSE Nifty dropped 152.15 points or 0.83 per cent to 18,266.60 points.

"Indices corrected quite meaningfully led by the expensive side of the market where valuations had got stretched. Almost all sectoral indices ended in the red, although PSU banks were seen bucking the trend with investors cherry-picking for value in that pocket. The street is taking note of the cost pressures emanating from higher input costs in companies that do not possess the pricing power," said S Ranganathan, head (research) at LKP Securities. Vinod Nair, head (research) at Geojit Financial Services, adds: "The ongoing market correction is not an overreaction and can sustain in the near-term due to high valuations. However, in the future Indian corporates will benefit from the reforms and China plus one strategy which happened during 2020-21."