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Bengaluru: Benchmark indices BSE Sensex and NSE Nifty slumped 1.6% on Monday on the back of an across-the-board selloff, as concerns over third-quarter earnings growth, the new HMPV scare and the continued flight of foreign capital impacted risk appetite of investors.
A depreciating rupee and weak trend in Asian markets further weighed on sentiment.
The 30-share Sensex tanked 1,258.12 points or 1.59 per cent to close at 77,964.99. During the day, it had fallen 1.81per cent. Meanwhile, the 50-share Nifty fell 388.70 points or 1.62 per cent to 23,616.05.
Investors on the BSE lost Rs 10.98 lakh crore on Monday. Last week, on January 1 and 2 - the first two trading sessions of the year - BSE investors had gained Rs 8.5 lakh crore.
“The primary catalyst for a sharp sell-off in the domestic market appears to be concerns over the human metapneumovirus (HMPV). Additionally, the initial Q3 consensus earnings estimate suggests a potential gradual recovery in domestic corporate earnings, which could explain the domestic market's underperformance compared to global markets led by premium valuation,"said Vinod Nair, Head of Research, Geojit Financial Services.
Nair added that emerging markets are undergoing consolidation due to uncertainties surrounding new US economic policies, the Federal Reserve's hawkish stance on future rate cuts, and a strong dollar, all of which are negatively impacting market sentiment.
“Indian equities faced intense selling pressure amid concerns regarding the outbreak of HMP virus and sharp fall in banking stocks post lacklustre quarterly updates. There was broad-based sell-off in the market with midcap and smallcap indices falling between 2-3 per cent each and all sectoral indices closing in the red,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services.
“We expect markets to remain volatile until concerns relating to the new virus ease out,” Khemka said.
From Sensex, Tata Steel, NTPC, Kotak Mahindra Bank, IndusInd Bank, Power Grid, Zomato, Adani Ports, Asian Paints, Mahindra & Mahindra and Reliance Industries were among the biggest laggards. Titan and Sun Pharma were the only gainers.
The BSE smallcap and midcap indices fell 3.17 per cent and 2.44 per cent respectively.
In Asian markets, Seoul settled higher while Tokyo, Shanghai and Hong Kong ended lower. European markets were trading on a mixed note. US markets ended in positive territory on Friday. Global oil benchmark Brent crude dipped 0.25 per cent to $76.32 a barrel.