Sensex plunges 839 points; Border tensions with China rattle markets

Foreign portfolio investors (FPIs) were buyers on Friday purchasing Indian equities worth $132.1 million whereas domestic institutional investors sold stocks worth $71.5 million.

The six-session rally in the equity benchmarks came to a halt on Monday as a flare-up in India-China border tensions hammered the investor sentiment. The benchmark Nifty declined by 260.1 points, or 2.23%, to close at 11,387.5 while the Sensex plunged 839.02 points, or 2.13%, to close at 38,628.29. Profit booking, depreciating rupee and the rolling out of new margin trading norms from Tuesday also weighed on the investor sentiment, traders said.

The Securities and Exchange Board of India (SEBI) decided not to give an extension to the deadline for the new margin trading norms, which added to the market woes as older pledges were unwound by brokerages.

According to experts, stocks on Monday witnessed a healthy correction. Sanjeev Hota, head of research, Sharekhan by BNP Paribas, said, “It will take some time for the markets to normalise with the new system introduced with Sebi’s action plan. There could be some impact and pressure on the markets but the quantum of impact would be dependent on liquidity in the markets and how much institutional investors can absorb. Additionally, there has been a rise in geopolitical tensions between China and India which made the markets jittery.”

Naveen Kulkarni, chief investment officer, Axis Securities, said, “In the afternoon session, the entire morning’s gains has converted into losses due to extreme volatility, led by the geopolitical tension on the India-China border, nervousness on Q1FY21 GDP numbers.”

The NSE on Monday witnessed a turnover worth Rs 23.48 lakh crore in the futures and options segment against the six-month average of Rs 14.9 lakh crore. Similarly, the cash market saw a turnover worth Rs 99,315.67 against the six-month average of Rs 51,793.2 crore.

Foreign portfolio investors (FPIs) were buyers on Friday purchasing Indian equities worth $132.1 million whereas domestic institutional investors sold stocks worth $71.5 million.

Major losers on the Nifty were Sun Pharmaceuticals, Zee Entertainment, SBI, Cipla and Shree Cement, down by 7.42%, 5.78%, 5.76%, 5.39%, and 5.3%. The only two gainers on the Nifty were ONGC and Tata Consultancy Services, up by 1.87% and 0.33%, respectively.

Global markets were mixed, with Asian markets closing in the red and European markets trading higher. Stock markets in China, Hong Kong and South Korea were down between 0.24% and 1.17%. European markets in Germany and France were up by 0.33% and 0.49%. The UK’s FTSE 100 was down by 0.61%.a