Markets witness bloodbath, SENSEX breaches 41,000

Indian equity benchmarks witnessed a bloodbath in Monday’s trading session by falling around two percent point, tracking a global selloff amid US-Iran tensions. The Sensex fell over 790 points, breaching the 41,000 mark, while Nifty fell below 12,000 level. This was the second consecutive day of fall for the domestic markets.

Key indices opened in red and stayed in the negative terrain for whole trading session, as traders remain concerned about apex exporters’ body FIEO’s statement that further escalation in the tension between the US and Iran will have implications on India’s exports to the Persian Gulf nation. Some cautiousness came in with a report stating that foreign portfolio investors (FPIs) began the year with profit booking as they withdrew a net sum of Rs 2,418 crore from the Indian capital markets in the first three trading sessions of January.

Key indices continued their free fall during the final hour of trade, as traders reacted negatively to reports that investors wealth tumbled by a whopping Rs 3.11 lakh crore in two successive sessions of decline in the equity market following escalation in tensions in the Middle East. Adding to the pain, economic think tank NIPFP said that states might be facing a consolidated revenue gap of up to Rs 1.23 lakh crore on account of withdrawal of compensation after the five-year GST transition period ends on June 30, 2022. At the time of implementation of the Goods and Services Tax on July 1, 2017, the Centre had promised to compensate states for loss of revenue for five years at an agreed formula. The street overlooked a private survey showed that the services industry accelerated to a five-month high in December 2019, raising hopes of an economic recovery. The IHS Markit Services Purchasing Managers’ Index (PMI) rose to 53.3 in December from 52.7 in November. This is the second straight month of expansion for Services PMI.

The BSE Sensex ended at 40,676.63, down by 787.98 points or 1.90 per cent after trading in a range of 40,613.96 and 41,378.34. There were 2 stocks advancing against 28 stocks declining on the index. The broader indices ended in red; the BSE Mid cap index fell 2.34 per cent while Small cap index was down by 1.93 per cent.

The top losing sectoral indices on the BSE were Metal down by 3.00 per cent, PSU down by 2.71 per cent, Bankex down by 2.46 per cent, Energy down by 2.46 per cent, and Realty down by 2.45 per cent, while there were no gaining sectoral indices on the BSE.

The few gainers on the Sensex were Titan Company up by 1.65 per cent and Power Grid up by 0.10 per cent. On the flip side, Bajaj Finance down by 4.63 per cent, SBI down by 4.43 per cent, Indusind Bank down by 3.96 per cent, Maruti Suzuki down by 2.98 per cent, and HDFC down by 2.86 per cent, were the top losers.