Sensex down over 1,700 points; banking and finance stocks crash

Rising Covid cases as well as reimposition of movement restrictions across states dented India’s stock markets on Monday. The NSE Nifty 50 index closed 3.53 per cent lower at 14,310.80, while the S&P BSE Sensex ended down 1,707.94 points or 3.44 per cent at 47,883.38.

The Nifty 50 has now retreated about 7 per cent and the Sensex is down 9 per cent from their mid-February record highs.

The rupee weakened to a more than eight-month low of 75.1375 against the dollar.

The new cases count has crossed 1.5 lakhs for the first time on April 11.

This spooked investors and led the S&P BSE Sensex and NSE Nifty50 to crash by over 3.5 per cent each.

Around 1.55 pm, Sensex traded at 47,842.31, lower by 1,749.01 points or 3.54 per cent from its previous close of 49,591.32.

The Nifty50 on the National Stock Exchange traded at 14,313.90, lower by 520.95 points or 3.51 per cent from its previous close.

“Taking cues from SGX Nifty, our market started the week on a negative note. Nifty opened gap down and continued its downward momentum,” said Jay Purohit, Technical & Derivatives Analyst, Motilal Oswal Financial Services.

“Selling pressure is quite severe as Nifty fell by more than 500 points and touched 14,283 levels.”

According to Gaurav Garg, Head of Research at CapitalVia Global Research: “The response from various state governments have been to impose lockdowns which has created a panic in the market and we are seeing sell off across the sectors.”

“All the support levels have been breached and the mood of the markets seems very bearish. Investors are advised to exercise caution while creating any fresh positions. The volatility is expected to remain in the market because of the underlying uncertainty.”

The key Indian equity indices traded deep in the red on Monday morning with the BSE Sensex dropping around 1,100 points amid resurgent Covid cases across the country and concerns of localised lockdowns.

An across-the-board selloff was led by finance, banking, auto and metal stocks.

Around 10 am, Sensex was trading at 48,488.66, lower by 1,102.66 points or 2.22 per cent from its previous close of 49,591.32.

It opened at 48,956.65 and has so far recorded an intra-day high of 48,956.65 and a low of 48,112.17 points.

The Nifty50 on the National Stock Exchange (NSE) was trading at 14,494.40, lower by 340.45 points or 2.29 per cent from its previous close.

Manish Hathiramani, technical analyst with Deen Dayal Investments said: “The resistance of 14,950-15,000 has worked once again. The market has taken a severe u-turn and has tested the 14,300-14,400 support.”

“For the markets to move up, we need to respect this support range and bounce up. 14,264 was the recent low recorded and if we break that, the next expected level is 13,900,” he said.

The top losers on the Sensex were IndusInd Bank, Bajaj Finance and SBI, while the only gainers were Sun Pharmaceutical Industries and Infosys.

Indian shares tumbled more than 3 per cent and the rupee hit an eight-month low on Monday as a relentless surge in COVID-19 cases and a possible lockdown by a large state threatened to derail a recovery in Asia’s third-largest economy.

India reported another record daily surge in coronavirus infections and overtook Brazil to be the second worst-hit country by the health crisis on Monday.

The state of Maharashtra, home to the country’s financial capital, Mumbai, is considering a lockdown and could take a final decision this week, a senior government official said.

Reliance and HDFC Bank closed Monday’s session more than 3 per cent lower and were the biggest two drags on the Nifty 50.

The Nifty PSU bank index, which plunged the most among sub-indexes, closed down 9.26 per cent, its worst day in more than a year.

The Nifty auto index closed down 5.11 per cent. The Society of Indian Automobile Manufacturers on Monday warned that the pandemic had set back an already bruised auto industry by many years.