Domestic stock markets on Monday plunged by 1,069 points as the Rs 20-lakh crore stimulus package announced by the government over the weekend failed to cheer investors, with the extension of lockdown for another two weeks and rising coronavirus infections adding to the selling pressure. Though other Asian markets advanced, the benchmark Sensex plummeted by 3.44 per cent to close at 30,028.98 points and the NSE Nifty Index fell 313.60 points to 8,823.25.
The rupee fell 33 paise to close at 75.91 against the US dollar, tracking weak domestic equities and foreign fund outflows. Rising crude oil prices and concerns about the effectiveness of the fiscal stimulus package also weighed on the forex market sentiment.
Uncertainty likely to continue
With the economic package announced by the government not seen as adequate considering the need of the hour and with infections rising unabated, the markets ended down in spite of positive global cues. Most measures may be seen as a long-term positive and markets were more worried about the immediate impact of these measures. With concerns about rising NPAs, financial stocks were most affected. Uncertainty is likely to continue.
Markets started the week on a pessimistic note and shed over three per cent as the details of the stimulus package fell short of market expectations, triggering a sharp reaction on the downside. “With an extension of the lockdown the market gave away more on a day when everything with the exception of TCS was pounded as financials were torn apart. An economic package worth more than 10 per cent of GDP and yet impacting the fiscal deficit to the tune of under one per cent failed to cheer bulls who feared demand may not get the desired boost to spur consumption,” said S Ranganathan, head of research, LKP Securities.
“The selling pressure was widespread… banking, financials, auto and realty counters were trashed badly. We had a similar situation on the broader front too as both the indices ended lower by 3.8 per cent and 2.9 per cent respectively,” said Ajit Mishra, VP – Research, Religare Broking. SBI fell 6.61 per cent, HDFC Bank 5.83 per cent, Axis Bank 7.55 per cent and ICICI Bank 7.44 per cent. TCS gained 2.72 per cent.
The economic package largely focused on providing credit support and guarantees and somewhere failed to touch upon the immediate need to boost consumption. Further, the rising number of coronavirus cases is another factor that is constantly haunting the investors. “We’ve been maintaining our negative view on markets and expect more pain ahead. Meanwhile, the guidelines for lockdown 4.0 from state governments and earnings would be actively tracked by the investors,” Mishra said.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines