Sensex plunges 634 points on global sell-off, equities end the week down by 3%

The Sensex crashed by 633.76 points, or 1.63%, to close at 38,357.18 while the 50-share Nifty was down by 193.6 points, or 1.68%, to close at 11,333.85.

Equities ended the week down by 3% after the markets tanked on Friday. The Sensex crashed by 633.76 points, or 1.63%, to close at 38,357.18 while the 50-share Nifty was down by 193.6 points, or 1.68%, to close at 11,333.85. The markets ended the day at their two-week lows tracking the sell-off in global markets.

The markets erased most of their two-week gains on Friday and traded in the red throughout the trading session.

According to Sanjeev Zarbade, vice-president – private client group research, Kotak Securities, “The market remained cautious on weaker-than-expected GDP prints and weak GST collections even while PMI and auto sales showed some improvement. On the economy front, real GDP growth of negative 23.9% for Q1FY20 revealed the extent of economic damage from Covid-19. Indo-China border tensions, rising cases of infections, global market correction and valuations are the key risks to the Sensex in our view. We see the risk reward ratio getting unfavourable at these levels. We advice caution at the current juncture.”

The stock markets had a gap down opening, following cues from Asian markets, which ended the day in the red. Bourses in China, Taiwan and South Korea were down between 0.87% and 1.15%. Similarly, Hong Kong’s Hang Seng tanked by 1.25%. The markets were tracking a sell-off in Wall Street overnight led by technology stocks as investors booked profits, leading to an 800-point fall in Dow Jones.

Meanwhile, brokerages such as Kotak Institutional Equities are betting on a quick rural recovery. In its report, the brokerage said, “Large cities like Mumbai, Bengaluru, Pune and Delhi also continue to see an ever-increasing number of cases, and the proportion of new cases in rural districts has remained flat for over two weeks now. Thus, we expect the rural and semi-urban areas to continue normalization at faster pace.”

Foreign portfolio investors were marginal buyers on Thursday – they bought stocks worth $1 million whereas domestic institutional investors bought stocks worth $15.8 million.

The futures and options segment on the NSE saw a turnover worth Rs 13.27 lakh crore against the six-month average of Rs 15.4 lakh crore. The cash market saw volumes worth Rs 55,270 crore, against the six-month average of Rs 53,128 crore.

The biggest losers on the Nifty were Tata Steel, Axis Bank, Adani Ports and SEZ, JSW Steel and NTPC, down by 3.99%, 3.83%, 3.55%, 3.37%, and 3.07%. The only gainer was Maruti Suzuki which was up by 1.76%.