Markets plunge as investors remain in selling mode
- Sensex crashes 667 pts; Nifty closes below 10,900
- Massive selling in index majors RIL and HDFC duo dragged the key indices lower
Mumbai: The Sensex crashed 667 points while the Nifty closed below the 10,900-mark on Monday as investors remained in selling mode for the fourth straight session amid frothy valuations and mounting Covid-19 cases. A depreciating rupee and grim macroeconomic data further sapped risk appetite, traders said.
The 30-share BSE Sensex, which opened in the red, stayed in the negative zone throughout the session to close at 36,939.60, down 667.29 points or 1.77 per cent. Similarly, the NSE Nifty tumbled 181.85 points or 1.64 per cent to end at 10,891.60.
The Sensex has now lost 1,553.35 points in four days, while the Nifty has shed 408.95 points.
Kotak Bank was the top loser in the Sensex pack in Monday's session, slumping 4.41 per cent, followed by IndusInd Bank, Axis Bank, ONGC, HDFC Bank, Bajaj Auto and Reliance Industries (RIL). Only six index constituents closed with gains - Titan, Tata Steel, SBI, L&T, HCL Tech and PowerGrid, spurting up to 3.15 per cent. According to traders, massive selling in index majors RIL and HDFC duo dragged the key indices lower. Further, foreign fund outflows and concerns over the unabated rise in Covid-19 cases across the world kept investors on edge, they added. On the macro front, India's manufacturing sector activity contracted at a slightly faster pace in July as demand conditions remained subdued, PMI data showed. The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) stood at 46 in July, down from 47.2 in June.
This is the fourth straight month of contraction for the Indian manufacturing sector. "As virus cases continued to rise and with the uncertainty regarding rate actions by the RBI, markets succumbed to the momentum slowdown visible in the last couple of trading sessions. Losses were led by financials.
"Although momentum has slowed down, stock specific action is still happening, dependent mainly on the earnings results and commentary. As long as the markets hold the current range, these downturns could be short-lived and should be utilised to accumulate quality stocks," said Vinod Nair, Head of Research at Geojit Financial Services.