Sensex Slumps 700 Points, Nifty Breaks 8,400 As Financial Stocks Drag

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Sensex Slumps 700 Points, Nifty Breaks 8,400 As Financial Stocks Drag

Financial stocks dragged markets lower; Kotak Mahindra Bank, SBI and HDFC Bank lost 3-8 per cent each

The markets have started FY21 on a negative note, in line with global peers, as India entered an eighth day of a 21-day lockdown to curb the spread of the deadly coronavirus pandemic. The S&P BSE Sensex index had opened 36.84 points higher at 29,505.33, and the broader NSE Nifty 50 benchmark started the day at 8,584.10, down 13.65 points from the previous close.

The markets soon lost stream thereafter and at 10.28 am, the Sensex was at 28,687, weaker by 780 points or 2.5 per cent and the Nifty was at 8,380, down 212 points or 2.5 per cent. The broader markets are out-performing the benchmark indices, with the BSE Midcap index shedding 1.3 per cent to 10,425 and the BSE Smallcap index losing 0.1 per cent to 9,599. Financial stocks were the major drags on the markets.

Equities elsewhere in Asia are having another weak session as the coronavirus continued to threaten global growth, leading a gauge of world stocks to post its biggest quarterly decline in more than a decade and oil prices to trade near lows last seen in 2002. Japan’s Nikkei fell 1.86 per cent in early trade.

Overnight in the US, Wall Street registered its biggest quarterly decline since 1987, and the S&P 500 suffered its deepest quarterly drop since the financial crisis on growing evidence of massive economic damage from the coronavirus pandemic. The Dow Jones ended 1.84 per cent lower, while the S&P 500 and Nasdaq Composite indices shed 1.60 per cent and 0.95 per cent respectively.

Oil prices mixed, US inventory build-up heightens oversupply concerns. Crude oil benchmarks opened the month mixed on Wednesday, following their biggest-ever quarterly and monthly losses, as data showed a bigger-than-expected rise in inventories in the United States. Brent crude was down by 21 cents, or 0.8 per cent, at $26.14 a barrel, while US West Texas Intermediate crude was up by 27 cents, or 1.3 per cent, at $20.75 a barrel.

Nifty Bank index slipped over 3 per cent. Kotak Mahindra Bank shed 8 per cent, while State Bank of India and HDFC Bank lost around 3 per cent each. And index heavyweight Reliance Industries shed 4 per cent to Rs 1,060.

On the other hand, IndusInd Bank, Gail and Maruti Suzuki gained between 2 per cent and 3 per cent each.

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