Budget 2020

Sensex tanks 627 points to close below 50,000 mark, HDFC twins crash about 4%

BSE Sensex ends lower by 627.43 points or 1.25% at 49,509.15; NSE Nifty slumps 154.40 points or 1.04% to close at 14,690.70

Equity benchmark Sensex tanked 627 points to close below the 50,000 level on March 31 due to heavy profit booking in HDFC twins, Reliance Industries and Infosys amid concerns over resurging coronavirus cases.

The 30-share BSE index ended lower by 627.43 points or 1.25% at 49,509.15 with 19 of its constituents ending in the red.

The broader NSE Nifty slumped 154.40 points or 1.04% to close at 14,690.70.

HDFC Bank and HDFC were top losers among Sensex stocks, a day after the private banking major admitted to some glitches in its online banking services. The bank, which has already faced the RBI penalty for disruption in online services, promised to resolve the issue and restore services.

HDFC tanked 4% while HDFC Bank declined 3.86% on BSE.

Among other major losers, PowerGrid fell 2.71%, Tech Mahindra by 2.5%, ICICI Bank by 1.71%, ONGC by 1.59%, Kotak Bank by 1.5%, Infosys by 1.28% and Reliance Industries by 1.25%.

On the other hand, ITC, Bajaj Finserv, HUL, SBI and TCS were among the gainers.

Among sectoral indices, BSE finance, bankex, power, telecom, energy and teck fell up to 1.73%, while realty, FMCG, consumer durables, basic materials and metals indices rose up to 1.89%.

Broader midcap and smallcap indices outperformed benchmarks, rising up to 0.52%.

“Domestic equities traded lower as concerns pertaining to spike in COVID-19 cases and resultant restrictions continued to weigh on investors’ sentiments,” said Binod Modi, Head – Strategy at Reliance Securities.

As many as 53,480 fresh infections pushed India’s COVID-19 tally to 1,21,49,335 while 354 new fatalities, the highest single-day spike so far this year, took the death toll to 1,62,468, according to Union health ministry data.

Further, a rise in U.S. treasury yields and strengthening dollar index aggravated concerns, Mr. Binod Modi added.

Financials, especially private banks, witnessed heavy profit booking, which along with selling pressure in IT stocks dragged benchmarks. However, investors continue to lap up FMCG, metals and pharma names.

Meanwhile, the global oil benchmark Brent crude was trading 0.58% lower at $63.80 per barrel.

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended in the red following a weak closing in Wall Street amid reports that U.S. President Joe Biden wants to spend over $2 trillion on infrastructure projects to push growth and create jobs, and would increase corporate tax to fund the spending.

Stock exchanges in Europe were also trading on a negative note in mid-session deals.

“Weak cues from across the globe forced the domestic market to shed yesterday’s optimism. U.S. markets had a weak close after the U.S. bond yield reached near its 14-month high level while European and Asian markets followed the trend. Private banks were the sectorial laggards due to selling seen in heavyweights. However, mid cap and small cap stocks remained in positive territory today,” Vinod Nair, Head of Research at Geojit Financial Services said.

Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities also said that markets opened weak as Joe Biden would unveil his infrastructure package on March 31 with an increase in corporate taxes.