Domestic benchmarks Sensex and Nifty erased early gains and fell sharply on Monday, as investors fretted over the extension of the nationwide lockdown till May 31. The absence of steps to create demand in government's fiscal stimulus package failed to revive confidence among domestic investors.
After a week of consolidation trend on PM Modi announcing a stimulus package of Rs 20.97 lakh crore, Sensex and Nifty fell sharply with businesses already suffering from supply and demand restrictions.
Benchmark Sensex and Nifty pre-opened mildly higher on Monday, although erased early gains and opened sharply lower. In afternoon session, Sensex was trading 1,000 points lower at 30,109, while Nifty fell 254 points to 8,882.
ICICI Bank, Zee Entertainment, Coal India, Kotak Bank, Axis Bank, SBI, Bajaj Finance, Titan, Maruti, IndusInd Bank, PowerGrid and ONGC were among the top losers on Sensex and Nifty today. On the contrary, Cipla, Bharti Infratel, Infosys, Britannia and TCS were among the top gainers today.
Worsening of the economic outlook for current fiscal and highest ever spike of record 5,000 plus COVID-19 cases in the country kept domestic sentiments tepid.
This was in contrast to overseas markets, where general trend was positive, on back of the strong upward rally from Wall Street amid the rise in oil prices, with many economies reopening after lockdown.
Here's a look at top 10 things to know about Sensex, Nifty crash today:
1. The government on Sunday extended coronavirus lockdown for the fourth time till May 31 (two more weeks) pan India. Since then, the suspension of public transport, movement of goods or cargo have taken a toll on various businesses and widespread job losses in the country since March 25, 2020.
2. Analysts said the supply side has received emphasis while demand initiatives are still awaited in the Covid relief package. Repurposed measures and already existing initiatives mixed with new elements were also part of the new announcements made. The FM announced strategic reforms in eight sectors - coal, minerals, defence production, airspace management, airports, power distribution companies in Union Territories, space and atomic energy. Investors also fretted over concerns of how these measures will revive the economy amid the COVID misery.
3. Foreign fund outflows also weighed on the currency and equity market today. As per the provisional exchange data, foreign institutional investors were net sellers in the capital market, as they sold equity shares worth Rs 2,388.04 crore on Friday. Contrary to this, domestic investors bought Rs 1,225.53 crore worth equities on Friday.
4. Barring SGX Nifty and Taiwan index, all the other indices in Asia rose marginally higher, tracking the rally in US indices. US stocks closed higher, as investors weighed US-China trade relation, weak economic data and the prospects of re-opening economies. European markets closed higher, with governments reopening factories, shops and other businesses.
5. Oil prices surged today as data showed increased demand in China post easing of lockdown restrictions. With multiple economies reopening borders and restrictions in trade and travel, oil gained on Monday, offsetting fears over the resurgence of coronavirus in some countries. Brent crude futures, the International oil benchmark, were trading 2.77% higher at $ 33.40 per barrel today.
6. Gold price in India hit new highs, in line with overseas commodity markets amid virus led uncertainty. The yellow metal that is seen as a hedge against inflation and currency debasement, gained today on concerns over US-China trade relations and comments by Fed head Powell, that encouraged investors preferring the risk-averse asset. On MCX, Gold Futures for June month gained Rs 369 to trade at Rs 47,750 per 10 gm, after rising to the day's high of Rs 47,929.
7. Meanwhile, markets globally also took cues from comments of Fed chairman. Federal Reserve Chairman Jerome Powell has said that the US, the world's largest economy, which has been thrown into a recession due to the coronavirus pandemic, will rebound from the recession but the recovery could stretch through the end of next year. Cues were mixed as he added later the US economy can begin to rebound in the second half, assuming the coronavirus doesn't erupt in a second wave but said a full recovery won't likely be possible before the arrival of a vaccine.
8. On domestic grounds, investors are also looking for signs of recovery from the latest and upcoming March quarter earnings. Companies set to announce their earnings are Bharti Airtel, Torrent Power, GlaxoSmithKline Pharmaceuticals, Astrazeneca Pharma, Maharashtra Scooters and Dr. Lal PathLabs among others.
9. Barring pharma, all the other indices were trading in red, with almost 5% fall in banking and financial sectors, followed by 3.5% decline in media and 2.5% loss in metal and auto stocks.
10. Worldwide, there are 4,805,210 confirmed cases and 316,732 deaths from the coronavirus COVID-19 outbreak as of today. Meanwhile, the total number of positive cases in India stands at 96,169, including 56,316 active cases and 36,824 cured cases. The death toll stands at 3,029.