Stock markets opened the week on a negative note, with the BSE Sensex and the NSE Nifty tumbling in early trade on Monday on the back of rising Covid-19 cases . Banking & finance stocks led the fall.
Analysts said the rising inflation number and contraction in IIP data also spoiled the mood. The sharp increase in the US treasury yields once again put global investors nervous and on sell mode, they added.
The BSE Sensex slumped below 50,000-point to hit a low of 49,899 at 11.20 am but recovered slightly to rule at 49,942.37, down 1.68 per cent, or about 850 points, against the previous day's close of 50,792.08. Similarly, the Nifty 50 slipped 1.53 per cent, or 233 points, at 14,797.30.
Asian markets were trading mixed this morning ahead of two-day FOMC meeting which begins tomorrow
"Sharp increase in CPI print for Feb’21 and unexpected contraction in IIP data for Jan’21 are expected to weigh on investor sentiment. Further, a sharp increase in USA treasury yields and recent spike in fresh Covid-19 cases in various parts of the country are likely to keep markets volatile in the near term,” said Binod Modi, Head Strategy at Reliance Securities.
CPI-based retail inflation came in at a three-month high of 5 per cent YoY in Feb’21 (v/s 4.1 per cent in Jan’21 and 6.7 per cent in Feb’20); IIP declined 1.6 per cent YoY in Jan’21 compared to +1.6 per cnet YoY in Dec’20. This fall was contrary to market consensus and our expectation of +1 per cent in Jan’21. The contraction was led entirely by manufacturing activity, said Motilal Oswal Financial Services.
Only six out of 30 Sensex companies are in the green. Tech Mahindra. TCS, HCL Tech, PowerGrid, Hindustan Unilever and Nestle India gained between 0.02 per cen to 1.3 per cent at 11.45 a.m.
Axis Bank, Bajaj Finance, Bajaj Finserv, ICICI Bank, State Bank of India, IndusInd Bank, M&M and HDFC fell in the range of 2.5-4 per cent.
All the market-cap based indices were in deep red. Among them the worst performer was BSE MidCapSelect Index, which tumbled 1.8 per cent. The BSEMidCap and the SmallCap indices fell 1.57 per cent and 0.9 per cent respectively.
But for BSE TECK, all the other sectoral indices slipped sharply, led by banking and finance, BSE Energy, BSE Realty and BSE Oil & Gas.
Jindal Poly, Welspun Industries, Poly Medicure, Vaibhav Global and UCO Bank were top gainers in broader market while India Glycol, Reliance Infra, Bliss GVS, ADF Foods and Magma were among top losers.