Indian benchmark indices bleed as bears take control

Ignoring all the measures taken by the government to arrest the economic slowdown, the Indian benchmarks started the holiday-truncated week on a disappointing note. The benchmark indices remained under immense pressure throughout the session and succumbed further in the last hour of selling. The last our sell-off dragged the benchmark indices to the day's low level with Nifty settling below 10,800 level while Sensex closing below the 36,600 mark.

At the end of the session, Sensex closed at 36,562.91, down 769.88 points or 2.06 per cent, while, Nifty slipped 225.35 points or 2.04 per cent to settle at 10,797.90.

The Indian stock market was expected to see some sell-off after the data released last Friday showed that India’s GDP grew at its weakest pace in over six years at 5 per cent in the April-June quarter as consumption demand was muted in the period. Weak growth concerns weighed down the sentiments of market participants. Adding to the woes, the IHS Markit Manufacturing PMI for India indicated that the country's manufacturing sector activities eased as the PMI hit its slowest in 15 months in August.

The rupee deteriorated further by 103 paise to 72.37 against the US dollar, as compared to the previous close of 71.40. Furthermore, weak auto sales number for the month of August also spooked negative sentiments.

On the global front, markets failed to get any positive support from the Asian and European markets as US-China trade war fears continue to weigh down the markets.

During the Tuesday session, selling was largely seen in the PSU bank sand auto stocks. PSU Bank stocks like Indian Bank, Canara Bank, Union Bank and Oriental Bank plummeted post the merger announcement on Friday. On the other hand, the shares of IDBI Bank jumped by nearly 8 per cent after the Union Cabinet, chaired by the Prime Minister, approved infusion of Rs. 4,557 crore in the bank.