M&M, TCS and Tata Steel among 29 losers in BSE pack; Nifty plunges 326 points.
Benchmark stock indices slumped on Thursday taking a cue from the sell-off witnessed in the U.S. and European markets. The diversion of funds from secondary market to the primary market by investors seeking to bid in multiple Initial Public Offerings (IPOs) also added to the meltdown, analysts said, adding that the market would remain weak in the days ahead.
The S&P BSE Sensex slid 1,115 points, or 2.96%, to settle at 36,553.60 points. Barring HUL, all the remaining 29 stocks in the 30-share Sensex ended with losses. Major losers included IndusInd Bank, Bajaj Finance, M&M, TCS, Tech Mahindra and Tata Steel. The NSE Nifty also plunged 326 points, or 2.93%, to 10,805.50. Top losers included IndusInd Bank, Tata Motors, Bajaj Finance, Grasim, and TCS. “Indian markets are following the global trend of sharp overnight sell-off in the U.S., EU,” Arjun Yash Mahajan, head — Institutional Business at Reliance Securities, said. “Asia opened weak and India followed the trend,” he added.
“Additionally, if we see, foreign portfolio investors have been sellers for most of this week,” he added.
IPOs sucking liquidity
“Finally, the list of IPOs that have hit the market is also sucking out liquidity from the secondary market. Elections and other political events in the U.S. will continue to have an impact and act as an overhang. It may not come as a surprise if we see continued weakness in India for some more time,” Mr. Mahajan said.
The selling pressure was widespread wherein IT, banking and auto were the top losers, Ajit Mishra, VP, Research, Religare Broking Ltd., said. He said the looming uncertainty over the stimulus package in the U.S., combined with the issue of rising COVID-19 cases worldwide, had raised concerns over the economic recovery. “And, it may deteriorate further if the virus situation results in partial lockdown,” he added.
He said since Nifty had been down by nearly 6% this week so far that it would be prudent for traders to wait for clarity before jumping into a trade, while investors should continue to accumulate fundamental sound stocks on dips. According to Vinod Nair, Head of Research at Geojit Financial Service, as volatility is expected to be high, traders should remain cautious.