Sensex slips 1,068 points, Nifty at 8,823 as economic stimulus fails to cheer Dalal street

Benchmark indices Sensex and Nifty closed sharply lower on Monday as investors fretted over the news of the extension of the nationwide lockdown till May 31. The government's Rs 20.97-lakh crore fiscal stimulus package also failed to revive confidence in domestic investors.

After a week of consolidation, Sensex closed 1,068 points lower at 30,028 and Nifty fell 313 points to 8,823.

India VIX, that measures volatility in equity market on a daily basis, climbed to 40 today, indicating high volatility in the bourses.

Sentiments toward the economic stimulus announced last week were also pessimistic as many analysts indicated that the supply side has received emphasis while demand initiatives are still awaited in the Rs 20.97 lakh crore package. Investors also fretted over how these measures will revive the economy amid the COVID misery.

S Ranganathan, Head of Research at LKP Securities said," An economic package worth more than 10% of GDP yet impacting fiscal deficit to the tune of under 1% failed to cheer bulls who feared demand may not get the desired boost to spur consumption."

Barring pharma, all the other indices were trading in red, with almost 5% fall in banking and financial sectors, followed by 3.5% decline in media and 2.5% loss in metal and auto stocks.

Bucking the trend, domestic market indices fell in today's trade as an extension of lockdown for two more weeks, with businesses already suffering from supply and demand restrictions.

With country recording a rise in Covid-19 cases each day, worsening of the economic outlook for current fiscal has also kept investors sentiments cautious. Foreign fund outflows also weighed on the currency and equity market today.

Markets overseas rose on back of the strong rally from Wall Street amid the rise in oil prices, with many economies reopening after lockdown. Barring SGX Nifty and Taiwan index, all the other indices in Asia rose marginally tracking the rally in US indices. European markets also traded higher today, with governments reopening factories, shops and other businesses.

Oil prices gained on Monday, offsetting fears over the resurgence of coronavirus in some countries, with Brent crude futures trading 2.77% higher at $ 33.40 per barrel.

Ajit Mishra, VP - Research, Religare Broking said," The selling pressure was widespread wherein the banking, financials, auto and realty counters were trashed badly. Meanwhile, the guidelines for lockdown 4.0 from state governments and earnings would be actively tracked by the investors."

Meanwhile, Rupee, the local unit ended lower at 75.91 per dollar in  the commodity market today, as against the earlier close of 75.56 per US dollar.

Share Market Update: Sensex ends 1,068 points lower, Nifty at 8,823; IndusInd Bank, Zee Ent top losers

Investors lose Rs 3.66 lakh crore as economic stimulus falls short of expectations