Sensex Tanks in Early Trade Amid BJP Poll Losses, Covid Scare

The raging pandemic, coupled with BJP’s losses in state polls, cast their shadow on Monday’s opening trade. BSE Sensex plunged by over 600 points in early trade on Monday, tracking losses in index-heavyweights Reliance Industries, HDFC twins and ICICI Bank, amid a negative trend in Asian equities.

As the Covid-19 pandemic continued to rage across the country, many states announced extended partial lockdowns, which is expected to keep economic momentum soft for May.

“Domestic equities do not look to be inspiring at the moment. NDA’s sub-par performance in West Bengal Assembly election and possibility of emergence of strong opposition from alliance of regional parties to fight against NDA may weigh on investors sentiments," said Binod Modi, Strategy Head at Reliance Securities.

The 30-share BSE index tanked 607.32 points or 1.24 per cent to 48,175.04 in initial deals. Similarly, the broader NSE Nifty tumbled 152.45 points or 1.04 per cent to 14,478.65.

Titan was the top loser in the Sensex pack, shedding around 3 per cent, followed by SBI, ONGC, Reliance Industries, Axis Bank, HDFC Bank, ICICI Bank, HDFC and Bajaj Finance.

Gainers included M&M, Bajaj Auto, Maruti, HUL, IndusInd Bank and Nestle India.

In the previous session, Sensex sank 983.58 points or 1.98 per cent to finish at 48,782.36, and Nifty fell 263.80 points or 1.77 per cent to 14,631.10.

Foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 3,465.07 crore on Friday, while domestic institutional investors (DIIs) purchased shares worth Rs 1,419.31 crore, according to provisional exchange data.

Concern over rising Covid cases and foreign fund outflows also affected the Indian rupee, which slumped by 24 paise to 74.33 against the dollar in opening trade on Monday, tracking weak domestic equities and strong American currency.

At the interbank foreign exchange, the domestic unit opened lower at 74.25 against the dollar, and lost further ground and touched 74.33, registering a fall of 24 paise over its previous close. On Friday, rupee had closed at 74.09 against the dollar.

The major trigger point for the markets could be the CPI and IIP numbers this week, Reliance Securities said in a research note adding that volumes could be low this week as Tokyo and Shanghai will remain closed for holidays. Across much of Asia and other countries, COVID-19 caseloads have surged and vaccination levels remain low, affecting performance.

In contrast the US market has steadily climbed in recent weeks, as investors remain optimistic that the pandemic is slowly and steadily coming to a close there.

The S&P 500 rose 5.2 per cent in April, its best monthly gain since November 2020, when President Joe Biden was elected, whereas Hong Kong’s Hang Seng lost 1.4 per cent to 28,324.30, and South Korea’s Kospi slipped 0.2 per cent to 3,123.47.