Sensex Drops Nearly 600 Points, Nifty Ends Below 15,800 Dragged By Banks


Sensex Drops Nearly 600 Points, Nifty Ends Below 15,800 Dragged By Banks

The Indian equity benchmarks fell sharply on Monday dragged by selling pressure in banking and financial services shares after the country’s largest private sector lender – HDFC Bank’s net profit came in lower than expected on higher provisioning for bad loans due to second wave of Covid-19. Meanwhile, weak trend in global markets also weighed on the investors’ sentiment. The Sensex fell as much as 734 points to hit an intraday low of 52,405.89 and Nifty 50 index touched an intraday low of 15,707.50.

The Sensex ended 587 points lower to close at 52,553 and Nifty 50 index dropped 171 points to settle at 15,752.

Asian shares stumbled to a one-week low and perceived safe haven yen edged higher amid a relentless surge in coronavirus cases and fears of rising inflation while oil prices fell on oversupply worries.

European markets were also trading on a weak note as Germany’s DAX dropped 1.34 per cent, England’s FTSE 100 index fell 1.31 per cent and France’s CSC40 index tumbled 1.55 per cent.

Global economic growth is beginning to show signs of fatigue while many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into some form of lockdown. The spectre of elevated inflation, which the market has long feared, is also haunting investors.

Economists at Bank of America downgraded their forecast for US economic growth to 6.5 per cent this year, from 7 per cent previously, but maintained their 5.5 per cent forecast for next year.

Back home, selling pressure was broad-based as nine of 11 sector gauges compiled by the National Stock Exchange ended lower led by the Nifty Private Bank index’s over 2 per cent fall.

Nifty Bank, Financial Services, Metal, and PSU Bank indices also fell between 1-1.85 per cent.

On the other hand, Nifty Metal and Realty shares witnessed mild buying interest.

Mid- and small-cap shares ended mixed as Nifty Midcap 100 index fell 0.74 per cent while Nifty Smallcap 100 index ended on a flat note.

On the primary market front, GR Infraprojects and Clean Science Technologies made blockbuster market debut as GR Infraprojects jumped as much as 109 per cent from issue price and Clean Science and Technology advanced 76 per cent from the issue price.

HDFC Bank was top Nifty loser, the stock dropped 3.3 per cent to close at Rs 1,472. IndusInd Bank, HDFC Life, Axis Bank, HDFC, Hindalco, Adani Ports, ONGC, Bajaj Finance, Maruti Suzuki, Eicher Motors and Kotak Mahindra Bank also fell between 1.5-3 per cent.

On the flipside, NTPC, Bharat Petroleum, Divis Labs, Nestle India, Tata Consumer Products, Dr Reddy’s Labs and ITC were among the gainers.

The overall market breadth was marginally positive as 1,762 shares ended higher while 1,563 closed lower on the BSE.

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