Domestic stock markets gave up all of their intraday gains in a volatile session on Monday, ahead of the release of official data on the country’s GDP in the April-June period. The S&P BSE Sensex index plunged 899.12 points from 40,010.17, its day’s highest level recorded in morning deals, to hit 39,111.05 on the downside. The NSE Nifty 50 benchmark dropped to 11,528.95 at the weakest level of the day, having risen to as high as 11,794.25 earlier on Monday. Analysts say concerns about the extent of damage caused by the coronavirus pandemic to economic and business activities hurt investor sentiment.
At 12:00 pm, the Sensex traded at 39,236, down 231 points from its previous close, and the Nifty was down 82 points at 11,565.
Earlier in the day, both indices had staged gap-up openings as investors cheered the government’s move to further ease the pandemic-related restrictions. However, the momentum was short-lived.
India is likely entering its deepest recession on record, which is expected to run through the second half of the fiscal year, as the rapid spread of the coronavirus pandemic continues to weigh on demand, hindering a pickup in business and economic activity.
In a major flare-up in Ladakh, Chinese troops “carried out provocative military movements to change the status quo” near Pangong Tso lake on Saturday night but they were blocked by Indian soldiers, the government said on Friday. The incidents took place overnight between August 29 and 30, according to a statement by the Army.
“Markets were overbought and at euphoric levels. Heightened geopolitical tensions between India and China after the Indian soldiers blocked Chinese troops near Pangong Tso lake and reports that India’s economic growth will be worst among the G20 nations are spooking the investor sentiment,” AK Prahakar, head of research at IDBI Capital, told NDTV.
Meanwhile, selling pressure was visible across sectors, as nine of 11 sector gauges compiled by the National Stock Exchange traded lower around noon. The Nifty Media index, down more than 3 per cent, was the worst hit among sectoral gauges.
Banking, auto, financial services, metal, pharma, capital goods and real estate shares also witnessed selling pressure. On the other hand, select IT shares bucked the trend.
Mid- and small-cap shares witnessed selling pressure. The Nifty Midcap 100 and Nifty Smallcap 100 indices were down over 1.5 per cent each.
IndusInd Bank was the top Nifty loser, down more than 4 per cent at Rs 636. Zee Entertainment, State Bank of India, JSW Steel, Bajaj Finance, Sun Pharma, Kotak Mahindra Bank, ICICI Bank, Eicher Motors, Maruti Suzuki, Bharti Airtel and Mahindra & Mahindra also fell between 1.6 per cent and 3.2 per cent each.
On the flipside, Reliance Industries rose nearly 1 per cent after the company on Saturday agreed to buy Future Group’s retail and other businesses for $3.38 billion. Shares of Future Enterprises rose about 5 per cent. ONGC, Bharti Infratel, Wipro, HDFC Bank, Adani Ports and tech Mahindra were also among the gainers.
Overall market breadth was extremely bearish as 2,080 shares were advancing while a little over 500 were gaining on the BSE.