Equity market came under heavy selling pressure on Thursday even after the Union Finance Minister Nirmala Sitharaman Wednesday announced a set of stimulus measures of nearly Rs 5.94 trillion to support micro, small, and medium enterprises (MSMEs), non-banking financial companies (NBFCs), and power distribution companies.

The S&P BSE Sensex tanked as much as 956 points or 3 per cent during the day while NSE's Nifty slipped 264 points or 2.8 per cent. At the close, the S&P BSE Sensex stood at 31,123, down 886 points or 2.8 per cent while Nifty ended at 9,143, down 241 points or 2.57 per cent. On the sectoral front, barring FMCG and pharma, all the indices on the NSE ended in the negative territory.

So, what triggered market sell-off today?

Wednesday's announcement by the Finance Minister, as per analysts, was more of leveraging on existing institutions and postponement of activities such as tax deducted at source (TDS) instead of fresh infusion of cash. That apart, some even suggest the announcements thus far have been short of expectations.

"Market was expecting a fresh infusion of liquidity which could have been in the form of external borrowings, using forex reserves or RBI balance sheet, among others. But, the government did not announce any such things. It has announced measures like postponement of TDS. Moreover, public sector units (PSUs) such as REC and PFC have to mobilise Rs 90,000 crore for the stressed power distributions companies. These things dented investor sentiment," explains G Chokkalingam, founder and managing director at Equinomics Research.

Pankaj Bobade, head of fundamental research at Axis Securities, on the other hand, suggests the announcements were short of market expectations.

"Though yesterday’s press conference by FM was just the first in a series, the outcome was below market expectations. This has led to risk aversion in the markets. Further, markets would be cautiously watchful of the announcements in the rest of the addresses to ascertain what is on offer by the government to kickstart the ailing economy and would cheer only if there is something to drive growth in the economy, propel consumption or investments. The markets, I believe, are eagerly waiting for such measures," Bobade said.

Weak global cues, Fed chair Jerome Powell's warning of prolonged economic weakness, subdued March quarter results, and companies' commentary and no concrete solution of the Covid-19 problem were the other major factors that dragged the market lower on Thursday.

Federal Reserve Chair Jerome Powell warned on Wednesday of an "extended period" of weak growth and stagnant incomes, pledged to use more of the central bank's power as needed, and issued a call for additional fiscal spending.

"It will take some time to get back to where we were," Powell said in a webcast. "There is a sense, growing sense I think, that the recovery may come more slowly than we would like. But it will come, and that may mean that it’s necessary for us to do more," Reuters quoted Powell as saying. Reacting to it, US stocks ended sharply lower on Wednesday and other global stocks, too, were trading weak on Thursday. CLICK TO READ

Commenting on the market outlook, Sudip Bandyopadhyay, Chairman at Inditrade Capital, says that the market is expected to hover at the current levels and will not fall drastically from here on. "Nifty is expected to move in the range of 8,500-9,500 levels for some time, " Bandyopadhyay says.