Bulls catch COVID-19, bears come out of it

Benchmarks plunge over 4% each

COVID-19 pandemic concerns continued to grip the equity markets on Monday with the benchmark indices shedding more than 4% as the number of virus cases in India neared the 1,300- mark.

The 30-share Sensex plunged 1,375.27 points, or 4.61%, to close at 28,440.32. The broader Nifty settled at 8,281.10, shedding 379.15 points, or 4.38%.

The selling on Monday was led by banking and automobile majors with stocks such as Bajaj Finance, HDFC, HDFC Bank, ICICI Bank, M&M, Kotak Mahindra Bank, Maruti Suzuki India, Hero Motocorp and State Bank of India (SBI) leading the declines in the Sensex.

The sectoral induces, representing banking and financials sector, were among the worst hit on Monday.

Impact on NBFCs

According to Crisil, the 21-day lockdown will have near-term impact on collections and fresh loan disbursements of non-banking financial companies with the microfinance segment getting most impacted as home loan segment would be relatively better as most borrowers are salaried individuals.

A section of the market participants also believe that with the number of cases rising in India and globally, the lockdown could be extended thereby affecting the economy in a much more adverse manner than was expected earlier.

No lockdown extension

On Monday, Cabinet Secretary Rajiv Gauba said that the government does not have any plans to extend the 21-day lockdown announced on March 24.

The investor pessimism was reflected in the weak market breadth as almost 1,400 stocks declined on BSE as against only 881 gainers. Foreign portfolio investors (FPIs) continued to sell Indian equities with Monday’s net selling pegged at ₹4,364 crore.

Elsewhere in Asia, the benchmarks of Japan, Hong Kong, South Korea, Indonesia, Taiwan, China, Malaysia Singapore and Philippines all ended in the red in Monday.

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Printable version | May 27, 2020 2:49:29 AM |

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