Business

Indices yo-yo as banking stocks wilt

Amid lockdown extension concerns, rise in virus cases, foreign investors net sell ₹1,662 crore shares

Indian benchmarks saw a highly volatile session with an underlying weakness on Tuesday with the Sensex moving in a range of almost 700 points as banking and financial stocks came under selling pressure amidst an overall weak global trend.

The 30-share Sensex, that opened lower by over 200 points, dropped further to touch 30,844.66, a fall of almost 720 points compared with Monday’s close. It managed to recoup most of the losses to close at 31,371.12, down 190.10 points, or 0.60%. The losses in the Sensex were led by Reliance Industries, Asian Paints, HDFC Bank, Kotak Mahindra Bank and Hindustan Unilever, among others. Earlier in the day all the banking constituents were deep in the red.

“The index traded with a negative bias till noon as the banking and financial stocks corrected. However, in the latter half, the banking space recouped intraday losses and hence, Nifty, too, recovered from lows to end the day a tad below the 9,200 mark,” said Ruchit Jain, Equity Technical Analyst, Angel Broking.

The broader Nifty ended Tuesday at 9,196.55, shedding 42.65 points, or 0.46%.

Investor sentiments remained subdued due to an overall weak trend in Asian markets as fresh concerns emerged over the economic impact of COVID-19. The concerns were mainly due to indications that the nationwide lockdown may be extended even as some areas may see ease in restrictions. A fresh wave of cases in some countries also weighed in on investor sentiments.

“Global sentiments were weakened on growing worries about a second wave of COVID-19 infections after Wuhan again reported new cases since its lockdown was lifted. Even renewed trade tensions between U.S.-China added to the woes,” said Siddhartha Khemka, head, retail research, Motilal Oswal Financial Services,adding the market was cautious also on account of the Prime Minister’s address.

Incidentally, the PM announced a stimulus package of ₹20 lakh crore, the details of which would be announced by the Finance Minister in the coming days.

“The package comes as a shot in the arm and we could see a strong opening today and any crossover of 9,500 levels would witness a broader positive move,” said Vikas Jain, senior research analyst, Reliance Securities, while highlighting the fact that the package amount was almost 10% of India’s gross domestic product (GDP).

Back on the bourses, the market breadth was extremely weak with over 1,400 stocks in the red on BSE against 870 that advanced. Foreign portfolio investors continued to offload Indian shares with Tuesday’s net selling pegged at ₹1,662 crore.

Elsewhere in Asia, the benchmarks of Hong Kong, South Korea, Taiwan, Indonesia, China and Singapore ended in the red on Tuesday.

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Printable version | Jul 9, 2020 4:14:27 AM | https://www.thehindu.com/business/indices-yo-yo-as-banking-stocks-wilt/article31568452.ece

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