Sensex, Nifty Drop Amid Decline in Heavyweight Stocks; Paytm Surges by 5%

On Wednesday, benchmark stock markets experienced a significant decline, marking their worst session in nearly three weeks. The downward trend was primarily driven by substantial losses in heavyweight financial and Information Technology stocks. This decline was attributed to the high volatility observed on Dalal Street, coupled with uncertainty surrounding the Lok Sabha election results and GDP data.

At the closing bell, the S&P BSE Sensex recorded a drop of 530.46 points, settling at 75,170.45 points, while the NSE Nifty 50 ended 178.95 points lower at 22,888.15.

Financial services stocks, which had been on a four-session winning streak, saw a decline of 1.65%. HDFC Bank, one of the leading players in this sector, experienced a 1.5% drop, ending its five-day rise. Additionally, the Nifty bank index fell by 1.3%.

Volatility continued to be a prominent feature, with the volatility index remaining near two-year highs, albeit slightly easing. Analysts attributed this volatility to uncertainties surrounding the margin of victory for the ruling Bharatiya Janata Party, as vote counting was scheduled for June 4.

IT stocks, sensitive to US rate cuts, also suffered, ending 1% lower.

Amidst this downward trend, Paytm witnessed a notable 5% rise following media reports suggesting potential stake acquisition by Indian billionaire Gautam Adani, chairman of the Adani Group. Although both Paytm and Adani Enterprises denied the stake sale talks, Adani Enterprises still closed 0.5% higher.

Hindalco Industries emerged as one of the top gainers, hitting a record high after its unit Novelis announced plans targeting up to a $12.6 billion valuation in a US initial public offering. Conversely, Prestige Estates Projects ended 3% lower after reporting a quarterly profit slump, contributing to a 0.9% decline in the Nifty realty index.

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