Domestic stock markets gave up all the day’s gains in a volatile session on Monday, as investors’ focus shifted to a flare-up between India and China on the border, from the rising cases of COVID-19, which has hampered the global economy. The S&P BSE Sensex index tanked 1,305.99 points from the intraday high of 38,704.18, registered in morning, to hit 38,704.18 on the downside in afternoon deals. The broader NSE Nifty 50 benchmark dropped to as low as 11,407.85 compared to its previous close of 11,647.60, having risen to as high as 11,794.25 in the first half of the day.
At 1:56 pm, the Sensex traded at 38,857.78, down 609.53 points – or 1.54 per cent – from its previous close, while the Nifty was down 203.45 points – or 1.75 per cent – at 11,444.15.
Sun Pharma, SBI, IndusInd Bank, Shree Cement and Eicher Motors, trading between 5.34 per cent and 6.38 per cent lower, were the worst hit among the 44 decliners in the 50-scrip Nifty basket.
ICICI Bank, HDFC and Kotak Mahindra Bank were the biggest drags to the Sensex.
The markets erased intraday gains after the government said Chinese troops “carried out provocative military movements to change the status quo” near Pangong Tso lake on Saturday night but they were blocked by Indian soldiers.
Analysts awaited official data on India’s GDP due at 5:30 pm. Economists predict the economy to contract 18.3 per cent in the quarter ended June 30, which would be its worst performance in at least eight years, according to a poll by news agency Reuters.
The data will fully capture the damage caused by COVID-19, as the country continues to ease restrictions imposed in late March to curb its spread. The country’s GDP had expanded 3.1 per cent in the January-March period.
“The market was trading in an over-bought zone, so a selloff was expected, and the news of fresh tensions at (the India-China) border has impacted sentiment,” said Rahul Sharma, market strategist and head of research at Equity99.
