BSE Sensex trades lower by 300 points, while the Nifty 50 trades above 10,600.
Shares fell for a fifth straight session on Monday, with the broader NSE index hitting its lowest in a month, as Asian shares slumped, while worries remained that the Reserve Bank of India would turn more hawkish at its policy meeting later this week, Reuters reported.
Investors remained concerned that the government widened its fiscal deficit target for the year starting in April to help finance higher spending in rural sectors and healthcare. The government also imposed a 10% LTCG tax for equity investments of more than one year. Investors will also keep an eye on the Reserve Bank of India’s interest rate decision on 7 February.
The carnage on Dalal Street on a scary Friday, February 2, shaved off $70 billion off domestic equities, sending shivers down investors’ spine.
The combined market capitalisation of all companies listed on the BSE fell by Rs 4.7 lakh crore to Rs 148.4 lakh crore, from just Rs 153.1 lakh crore previously, as bulls gave in to bears.
A total of 2,500-odd stocks tumbled against 300-odd that managed to rise, suggesting the sell-off was broad based, with smallcap and midcap shares at the receiving end.
“Definitely, there was a lot of froth in the market and midcaps were trading at very high valuations. We were also finding it difficult to recommend stocks now or 10 days back. But in the last 10 days, the good thing is that the selling started at least 7-8 days before the Budget. So, a lot of correction has happened before. We are seeing this capitulation may continue on Monday. One really cannot take where the market bottoms,” Neeraj Deewan from Quantum Securities told the Economic Times.
The Sensex plunged 839.91 points, or 2.34 per cent, to settle at 35,066.75. The Nifty declined 256.30 points, or 2.33 per cent, to 10,760.60. Midcap and smallcap indices fell over 4 per cent. Fear gauge India VIX spiked.