Domestic stock markets gave up all of the day’s gains in a volatile session on Monday, as investors’ focus shifted to an India-China outbreak at the border, from mounting cases of COVID-19. The S&P BSE Sensex Index fell 1,614 points from an intraday high of 40,010.17 to drop below the 39,000 mark and the benchmark NSE Nifty 50 Index touched an intraday low of 11,325.85 at the weakest level of the day, having risen up to a maximum of 11,794.25.
The Sensex closed at 38,628.29, down 839.02 points, or 2.13 percent, from its previous close, and the Nifty closed 260.10 points, or 2.23 percent, lower at 11,387. ,fifty.
Markets erased intraday gains after the government said Chinese troops “carried out provocative military moves to change the status quo” near Pangong Tso Lake on Saturday night, but were blocked by Indian soldiers.
Investors also posted gains as they awaited official data on India’s GDP at 5:30 pm. Reports suggest that the country’s GDP growth would be worst among the G20 nations.
Economists predict the economy will contract by 18.3 percent in the quarter ending June 30, which would be its worst performance in at least eight years, according to a Reuters news agency survey.
The data will fully capture the damage caused by COVID-19, as the country continues to ease restrictions imposed in late March to slow its spread. The country’s GDP had expanded by 3.1 percent in the January-March period.
“Markets were overbought and at euphoric levels. Rising geopolitical tensions between India and China after Indian soldiers blocked Chinese troops near Pangong Tso Lake and reports that India’s economic growth will be the worst among the G20 nations are scaring investor sentiment, “AK Prahakar, head of research at IDBI Capital, told NDTV.
On Dalal Street, the selling pressure was visible across all sectors as the 19 sector indicators compiled by BSE ended lower led by the nearly 5% drop in the S&P BSE Realty Index. The indices for banking, automobiles, capital goods, energy, metals, basic materials, pharmaceuticals, oil and gas and telecommunications also fell between 2 and 4.5 percent.
Mid-cap and small-cap stocks also experienced selling pressure, as the S&P BSE MidCap Index fell 3.79% and the S&P BSE SmallCap Index plunged 4.37%.
Forty-eight of the 50 stocks in the Nifty 50 Index ended lower. Sun Pharma was Nifty’s main loser, shares fell 7% to close at Rs 515. State Bank of India, Cipla, Bajaj Finserv, Zee Entertainment, IndusInd Bank, NTPC, Eicher Motors, Bajaj Finance, Shree Cements, ICICI Bank , Kotak Mahindra Bank and Hindalco also fell between 4.5 and 6 percent.
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