Sensex and Nifty tumbled on last trading day of this week after Reserve Bank of India (RBI) Governor Shaktikanta Das announced extension of moratorium on payment of all term loans by another three months and said India's GDP growth is likely to remain in the negative zone in FY21. Growth might pick up in the second half of FY 2020-21, Das added.
While Sensex closed 260 points lower at 30,672, Nifty ended 67 points lower at 9,039. Top losers were banking stocks on extension of moratorium on payment of all term loans. BSE bankex ended 2.44% or 497 points lower at 19,909.
Similarly, bank Nifty plunged 456 points or 2.57% to 17,278. The index slipped 630 points to 17,105 intra day against previous close of 17,735. The banking indices hit their intra day lows soon after the announcement of extension of moratorium by RBI governor Shaktikanta Das.
Axis Bank, ICICI Bank, IndusInd Bank and HDFC Bank were top sector losers on Sensex. On Nifty, Axis Bank, ICICI Bank and HDFC Bank were top banking losers. On BSE bankex, all eight components except Kotak Bank closed in the red.
SBI which ended 0.72% lower at Rs 150.85 fell to a fresh 52 week low of Rs 149.55.
Kotak Mahindra Bank managed to close 0.91% higher at Rs 1,160.25 on BSE. On Sensex, Axis Bank was the top laggard, plunging more than 5 per cent, followed by HDFC, Bajaj Finance, ICICI Bank, Tata Steel, Bajaj Auto, HDFC Bank and IndusInd Bank.
M&M, Infosys, Asian Paints, UltraTech Cement and Tech Mahindra were top gainers on the 30 stock index.
BSE mid cap and small cap indices ended 93 points and 24 points lower at 11,270 and 10,524, respectively. Other losers were metal stocks with their BSE index slipping 125 points to 6,192.
"Indian equity markets ended in red amid a highly volatile session. India VIX further cooled down by 2.4% to 32 levels. Oil prices fell over 5% towards $34 a barrel as tensions rose between the United States and China, and doubts grew about the pace of demand recovery from the coronavirus crisis. In the near term, the market will focus on the global cues and the quarterly results. Investors will closely monitor the development of coronavirus cases and vaccines, US-China relationship, crude oil prices movements and economic policies," said Siddhartha Khemka, Head - Retail Research at Motilal Oswal Financial Services.
Market breadth was negative with 932 stocks ending higher against 1,365 shares ending lower on BSE. 153 stocks were unchanged. The top four drags on the Nifty 50 were banks or finance companies. The nation's top mortgage lender HDFC Ltd fell 5.1% to Rs 1,515 compared to previous close of Rs 1,597.30.
Ajit Mishra, VP - Research at Religare Broking said, "Markets were hoping some measure from the RBI that could boost the banking and financial sectors but the announcement of the extension of moratorium further dented the sentiment. The brewing feud between US-China is further also adding to the participants' worries. We may see some rebound next week due to oversold positions in banking and financial space but sustainability would be difficult at the higher levels. Traders should prefer hedged trades and prefer defensive viz. pharma, IT and select FMCG for long trades."
Top gainers were IT stocks with their BSE index rising 239 points to 14,029.
In global market action, Hong Kong led a sell-off across Asian equities after China introduced proposals to enact a national security law for the city. Bourses in Shanghai, Tokyo and Seoul ended significantly lower. Stock exchanges in Europe were trading on a negative note in early deals.