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Sensex, Nifty Drop 2% As Financial Stocks Weigh On Markets

Sensex, Nifty Drop 2% As Financial Stocks Weigh On Markets

Losses in banking and financial services stocks dragged the markets lower

Domestic stock markets started the week on a negative note tracking weakness in global equities amid fears about a second wave of COVID-19 infections. The S&P BSE Sensex index fell as much as 2.29 per cent - or 775.21 points - to hit 33,005.68 in the first half of the session, after starting the day down 110.34 points at 33,670.55. The broader 50-scrip NSE Nifty benchmark slid to as low as 9,749.15, having opened weaker at 9,919.35 compared to its previous close of 9,972.90. While losses in banking and financial services stocks dragged the markets lower, gains in IT and pharmaceutical shares limited the downside.

At 11:26 am, the Sensex traded 732.92 points - or 2.17 per cent - lower at 33,047.97, while the Nifty was down 214.90  points - or 2.15 per cent - at 9,758.00.

In the 50-scrip Nifty basket, 44 shares moved lower at the time. Top percentage losers were IndusInd Bank, ICICI Bank, Axis Bank, JSW Steel and Tata Steel, trading between 4.47 per cent and 5.57 per cent lower. On the other hand, Mahindra & Mahindra, Zee Entertainment and Wipro were among the counters that bucked the trend, but gains were limited, trading up 0.89 per cent, 0.83 per cent and 0.53 per cent respectively. 

HDFC Bank (down 3.20 per cent), ICICI Bank (5.16 per cent) and HDFC (3.00 per cent) alone accounted for a fall of more than 300 points in the Sensex.

The government said on Sunday it would provide New Delhi authorities with 500 railway coaches that will be equipped to care for coronavirus patients, after a surge in the number of cases led to a shortage of hospital beds.

Equities in other Asian markets started the day on the backfoot while oil prices slipped as fears of a second wave of coronavirus infections in China sent investors scurrying for safe-havens.

While MSCI's broadest index of Asia Pacific shares outside Japan was last seen trading 0.66 per cent lower, Japan's Nikkei 225 benchmark was down 0.55 per cent.

China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's KOSPI indices were down 0.13 per cent, 0.83 per cent and 0.28 per cent respectively at the time. 

The E-Mini S&P 500 futures were down 1.28 per cent in early Asian trade, indicating a lower start for US equity markets on Monday. 

On Friday, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite benchmarks finished 1.31 per cent, 1.90 per cent and 1.01 per cent higher respectively on Friday. 

Back home, the S&P BSE Sensex index ended 242.52 points - or 0.72 per cent - higher at 33,780.89 on Friday, and the broader NSE Nifty 50 benchmark settled at 9,972.90, up 70.90 points - or 0.72 per cent - from its previous close. Both benchmark indices however registered weekly losses of more than 1 per cent after two weeks of gain.

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The government put off the release of headline consumer price inflation numbers for April and May due to inadequate data collection.

The headline numbers for retail inflation for the two months, and industrial output for April were not released "in view of the continued limited transactions of products in the market" during the coronavirus-triggered lockdown and problems in collecting of adequate data, the Statistics Ministry said.