Domestic stock markets slumped more than 2 per cent on Thursday, a day after Finance Minister Nirmala Sitharaman announced the first instalment of measures as part of the government's "Atma Nirbhar Bharat" economic package to help the economy battle the fallout from the coronavirus (COVID-19) pandemic and the weeks-long lockdown. The S&P BSE Sensex index plunged as much as 955.96 points to 31,052.65 during the session, whereas the broader NSE Nifty 50 benchmark fell to as low as 9,119.75, down 263.8 points from the previous close. A selloff in financial and IT stocks dragged the markets.
The indices pared some of those losses by the end of the session. The Sensex ended 885.72 points - or 2.77 per cent - lower at 31,122.89 and the Nifty settled at 9,150.10, down 233.45 points - or 2.49 per cent - compared to its previous close.
In the Nifty basket of 50 components, 39 shares finished the day lower. Top percentage losers were Tech Mahindra, Infosys, Hindalco, HDFC, GAIL and IndusInd Bank, closing between 4.22 per cent and 5.32 per cent.
On the other hand, Bharti Infratel, Hero MotoCorp, Zee Entertainment and Larsen & Toubro - ending between 1.87 per cent and 4.33 per cent higher - were the top Nifty gainers.
Reliance Industries (closing down 4.07 per cent), HDFC Bank (3.62 per cent) and HDFC (4.69 per cent) together accounted for a loss of 450 points in the Sensex.
The Finance Minister said after market hours on Wednesday that loan guarantees worth Rs 4.5 lakh crore will be provided to small businesses, non-banking financial companies and power firms. In addition, the government will set up two debt and equity funds amounting to Rs 70,000 crore to support stressed businesses.
The measures were part of a Rs 20 lakh-crore fiscal and monetary package announced by Prime Minister Narendra Modi on Tuesday to support the economy, which has been battered by a weeks-long lockdown to curb the coronavirus. Ms Sitharaman also announced provident fund and tax benefits for people as well as extended the due dates for filing income tax returns.
The initial details of the plan failed to excite investors who were expecting more.
Economists said that although the measures outlined amounted to policy support of Rs 5.9 lakh crore, the fiscal impact on the government's budget would be less than Rs 25,000 crore.
Finance Minister Nirmala Sitharaman was due to unveil more steps later in the day and in the coming days.
The country has been under a weeks-long lockdown that has hit the livelihood of millions of workers, while leaving many businesses without revenues. Coronavirus infections have been rising steadily in the country and on Thursday surpassed 78,000, with more than 2,500 deaths.
World markets also fell after a sobering warning from the World Health Organization that the coronavirus may never go away and Federal Reserve Chairman Jerome Powell's prediction of an "extended period" of weak economic growth.
