Ebene Magazine – Here’s why investors lost Rs 7 trillion in trade on Monday en

0
0

Nikita Vashisht |
New delhi
Last Updated at April 12, 2021 10:54 IST

Bears launched an all-out attack on the stock markets on Monday as record daily cases of Covid-19 infections weakened bull reign. The benchmark S&P BSE Sensex and the Nifty50 indices cracked 1,479 points and 451 points, in the early morning deals, to hit intra-day lows of 48,112 and 14,384 levels, respectively. Consequently, investor wealth plummeted by nearly Rs 7 trillion within minutes into trade to Rs 202 trillion.

Volatility ran high in the markets as India VIX, the volatility gauge for the indices, soared over 11 per cent in the intra-day.document.write(« « );googletag.cmd.push(function(){googletag.defineOutOfPageSlot(‘/6516239/outofpage_1x1_desktop’,’div-gpt-ad-1490771277198-0′).addService(googletag.pubads());googletag.pubads().enableSyncRendering();googletag.enableServices();});

Index heavyweights such as Reliance Industries, HDFC Bank, HDFC, ICICI Bank, SBI, Bajaj Finance, TCS, and L&T declined up to 7 per cent and contributed nearly 819 points towards the Sensex’s intra-day fall. That said, brisk-buying in fundamentally strong defensive counters such as Infosys, Cipla, Cadila Health, and Dr Reddy’s Labs capped the fall.

“Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy and the markets. Since the situation is the worst in economically significant Maharashtra, this can impact the market’s assumption of around 11 per cent GDP growth and above 30 per cent earnings growth,” says Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

From an investment viewpoint, he believes that pharma and IT sectors are likely to remain resilient even during a market downturn courtesy the health crisis and rupee depreciation. However, cyclical stocks are likely to be under pressure.

Record Covid infections: Breaking all records, India recorded a massive surge of 169,914 Covid-19 cases in the last 24 hours, placing itself once again as the second-worst hit nation globally, with 13,527,717 cases in total, according to the Union Health Ministry’s data. Besides, India also witnessed a grim record of fatalities due to Covid-19 in a single day in 2021, which stood at 904.

Lockdown woes: The Maharashtra government is contemplating a state-wide lockdown to stem the rising cases of coronavirus, and may take a decision by Wednesday, April 14.

The state health minister Rajesh Tope said on Sunday that the government is discussing the duration of the lockdown and how to handle its economic fallout. “The task force is of the view that the prevailing coronavirus situation in the state is such that a lockdown is required,” he said.

Economically important state of Maharashtra accounted for 37 per cent of the total Covid cases reported on Sunday with over 63,000 new cases in its highest ever single-day surge along with 349 deaths.

That apart, many other states, including Delhi, have imposed strict restrictions including night curfews, capacity constraints, mandatory Covid-19 testing for inter-state travelers, etc.

Rupee depreciation, FPI outflow: Foreign portfolio investors (FPIs) have withdrawn a net Rs 929 crore from the Indian markets so far this month amid concerns over economic recovery.

According to the depositories data, overseas investors pulled out Rs 740 crore from equities and Rs 189 crore from the debt segment, taking the total net withdrawal between April 1-9 to Rs 929 crore, reversing buying trend of March ( Rs 17,304 crore), February (Rs 23,663 crore ), and January (Rs 14,649 crore).

Rusmik Oza, executive vice president, head of fundamental research at Kotak Securities notes that FPI outflows came on the back of a rise in Covid-19 cases and a sharper depreciation in the Indian rupee compared with USD.

The rupee on Monday opened at an eight-month low of 74.96 per US dollar compared with Friday’s close of 74.74/$. It further extended the fall and hit a low of 75.14 per US dollar.

Sell-off in banking counters: Banking stocks fell like a pack of cards at the bourses on Monday as a “sharper, stronger, and more dangerous” second wave of Covid-19 raised concerns of economic fallout.

The Nifty Bank index tumbled 1,613 points and hit a low of 30,835, a level last seen in January 2021. Individually, shares of RBL Bank, IndusInd Bank, IDFC First Bank, HDFC Bank, Axis Bank, and ICICI Bank skidded between 3 per cent and 8 per cent.

Public sector banks, meanwhile, faced an even severe blow with stocks of Indian Overseas Bank, Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank, and State Bank of India losing in the range of 6 per cent to 9 per cent.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is happy to inform you of the launch of « Business Standard Premium Services »

As a premium subscriber you get an across device unfettered access to a range of services which include:

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.
Enjoy Reading!
Team Business Standard

Related title:
Here's why investors lost Rs 7 trillion in trade on Monday
TCS, Infosys, State Bank of India, Vodafone Idea, M&M, South Indian Bank among stocks in focus
Sensex nosedives over 1400 points in early trade; Nifty tests 14400
Sensex Crashes Over 1100 Points, Nifty Below 14500 Dragged By Banks
Sensex slips 1400 points amid record Covid-19 cases, prospects of Maharashtra lockdown
Sensex tanks 1100 points, Covid scare grips markets
Indian shares slide as Covid-19 cases continue to surge
Sensex crashes about 1500 points, rupee slumps below 75 vs USD: 10 updates
Sensex plunges over 1000 points, Nifty hovers around 14500 amid rapid spike in fresh Covid-19 cases
Market LIVE Updates: Nifty falls over 2%, Sensex drops more than 1000 pts amid lockdown woes

en

Ref: https://www.business-standard.com

QU’EN PENSEZ-VOUS?

[comment]

PUB

Laisser un commentaire, votre avis compte!

[gs-fb-comments] [comment-form]

Laisser un commentaire, votre avis compte!