Stock Market Update: Sensex plunges 637 points; Nifty closes below 18050

Stock Market Update: As investors expressed concern over the growing COVID-19 cases in China and the Federal Reserve's plan to raise interest rates, metal equities led a general fall in Indian shares on Wednesday.

Wall Street decreased

The Fed's December meeting minutes are due during regular business hours in the United States. After four consecutive 75-bps rate increases, the central bank increased rates by 50 basis points last month and hinted that they would continue to rise. Overnight, Wall Street decreased.

According to Neeraj Dewan, director of Quantum Securities, Indian equities also declined as a result of caution before the minutes.

Stock Market Update: Asian markets and top losers

Despite a choppy start, Asian markets recovered, with MSCI Asia ex Japan climbing 1.39% amid expectations for a quick post-COVID era comeback in China.

Among the main Indian sectors, the metals index slid 1.5%. Thirty-six of the Nifty 50 constituents were lower, with Hindalco Industries, JSW Steel among the top losers.

Uncertainty over demand recovery

According to analysts, the influx of COVID-19 cases has prompted metal businesses to provide retailers discounts, muting the impact of price increases, while demand recovery in China is questionable.

According to Mohit Lohia, research analyst at ICICI Securities, "although the prices across metal sectors… have increased in January, companies' margins are not experiencing a considerable improvement."

Stock Market Update: Equitas Small Finance Bank

Vedanta, one of the individual stocks, dropped 3% after reporting a 9% reduction in average gross operational production for the third quarter, along with a decline in aluminium production.

Equitas Small Finance Bank, on the other hand, increased more than 5% when the Reserve Bank of India authorised SBI Funds Management to acquire a stake in the lender.

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