As Indian benchmark equity indices lost more than 3% each on Monday with the Sensex shedding more than 1,000 points as the stimulus package announced by the finance minister failed to cheer the market with a further extension of the nationwide lockdown till May 31 acting as a catalyst in dampening sentiments.
The 30-share Sensex lost 1,068.75 point's or 3.44% to close at 30,028.98. Earlier in the day, it fell below the 30,000-mark to touch a low of 29,968.45.
As many as 28 of the 30 constituents of the Sensex ended the day in the red with financials bearing the maximum brunt of the selling pressure.
While Indusind Bank lost over 10% on Monday, stocks like ICICI Bank, Axis Bank, HDFC and Bajaj Finance all lost over 7% each.
The overall market breadth was extremely weak with more than 1,700 stocks in the red, as against less than 600 gainers. As many as 272 stocks hit their lower circuit on Monday.
Meanwhile, the broader Nifty settled the day at 8,823.25, down 313.60 points or 3.43%. The India VIX index surged a little over 7.5% on Monday after laying low for the past few days.
Further, the Nifty Bank and Nifty Private Bank were the biggest losers among sectoral induces, shedding nearly 7% each.
Incidentally, the fall was largely on account of domestic factors as most of the Asian markets gained ground on Monday.
"Indian indices ended lower contrary to the trend in Asian and European markets for the third consecutive day as details of ₹20 lakh crore stimulus package announced by the Finance Minister over Wednesday and Sunday disappointed listed corporates and market participants," said Deepak Jasani, Head - Retail Research, HDFC Securities.
Extension of lockdown and large additions of Covid-19 cases also dampened spirits, he added.
Market participants believe that while the government has announced stimulus measures for various sectors, there is little action to push demand in the near future.
"While these measures show long-term promise, a lack of schemes to boost demand may be seen as a disappointment by investors after the recent 30% market rally," stated global financial major CLSA in a report released on Monday.
In a similar context, a Bernstein Research stated that the equity markets will not be enthused euth the announcements since "it is less likely to support the economy in the near/medium term."
"The plan in our view, was a general economic agenda and lacked substantive decisions to support consumption, promote manufacturing and even the broader reforms lacked the spark while urban and corporates were ignored," it said.
