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Thursday, May 28, 2020

Sensex crashes 2,002 points on trade tension, lockdown extension

The rupee fell 64 paise to settle at 75.73 against the US dollar, amid the heavy selloff in domestic equity market and strengthening of the greenback overseas.

By: ENS Economic Bureau | Mumbai | Published: May 5, 2020 3:03:14 am
ndian stock market live updates today, bse sensex, nse nifty 50, stock market crash, business news india, share market news update,coronavirus, coronavirus news, covid 19 tracker, covid 19 india tracker, coronavirus The benchmark Sensex plummeted by 2,002 points to 31,715.35 in the selling avalanche, while the NSE Nifty Index fell 566 points to 9,293.50, even as the manufacturing PMI Index showed a sharp decline in April. (Express photo by Nirmal Harindran)

DOMESTIC markets on Monday dived close to 6 per cent as weak global cues after the latest flare-up in US-China tension and yet another extension of the nationwide lockdown hit investor sentiment. The benchmark Sensex plummeted by 2,002 points to 31,715.35 in the selling avalanche, while the NSE Nifty Index fell 566 points to 9,293.50, even as the manufacturing PMI Index showed a sharp decline in April.

The rupee fell 64 paise to settle at 75.73 against the US dollar, amid the heavy selloff in domestic equity market and strengthening of the greenback overseas.

Auto stocks plunged up to 12.5 per cent after top carmakers, including Maruti Suzuki, reported zero monthly domestic sales for the first time in April, after the nationwide lockdown halted output and shut sales network. The BSE Auto index fell 6.88 per cent.

Analysts said the third extension of the lockdown is expected to further damage the economy. “The ongoing lockdown and the slump in consumer spending will further hit the economy. The government should allow the economy to function,” said BSE dealer Pawan Dharnidharka.

“Although the major markets in Japan and China were closed for holidays, stocks in other Asian markets fell as tension between the US and China weighed on investor sentiment. The sentiments also remained downbeat after Indian manufacturing activity growth declined sharply in the month of April 2020 amid national lockdown restrictions to help stem the spread of the coronavirus disease,” said Narendra Solanki, head- equity research, Anand Rathi Shares & Stock Brokers.

Explained

Global cues to dominate market trend

Although the major markets in Japan and China were closed for holidays, stocks in other Asian markets fell as tension between the US and China weighed on investor sentiment. The sentiments also remained downbeat after Indian manufacturing activity growth declined sharply in the month of April 2020 amid national lockdown restrictions to help stem the spread of the coronavirus disease. With no major development on the local front, global cues would continue to dictate the market trend.

The selling in domestic markets was led primarily by financials, metals and auto stocks with almost all the major sectoral indices ending in red except pharma.

Ajit Mishra, VP-research, Religare Broking: “Bears took charge as the Indian market registered a sharp decline of due to feeble global cues and subdued earnings season.” The broader markets were also not spared as both the indices registered losses of 4.3 per cent and 3.1 per cent. “The abrupt end of the recovery has certainly caught the participants completely off-guard and we might see the index drifting further lower ahead. With no major development on the local front, we feel the global cues would continue to dictate the market trend,” he said.

The S&P 500 and Dow Jones dropped for the third session on Monday following a US-China spat about the origins of the coronavirus outbreak. At 11:21 a.m. ET Dow Jones was down 207.46 points, or 0.87 per cent, at 23,516.23.

Oil prices fell on worries that a global oil glut may persist even as coronavirus pandemic lockdowns start to ease. Brent crude was down 7 cents, or 0.3 per cent, at $26.37 at 1339 GMT.

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