The Sensex and Nifty fell in afternoon trade amid a depreciating rupee, rising crude oil prices and selling pressure on stocks of non-banking financial companies (NBFCs). On the global front, China reportedly rebuffed a plan for talks with the US on resolving their dispute over trade and technology which roiled Asian stocks.
While the Sensex was trading 519 points or 1.41% lower, the Nifty lost 170 points or 1.53% to trade at 10,971 level.
Sensex loses over 500 points, Nifty falls below 11,000 level; auto, banking stocks lead losses
IT stocks were the top gainers on the Sensex as rupee fell to 72.73 level against the dollar.
TCS (3.42%), Infosys 2.75% were the top Sensex gainers. Top losers on the index were M&M (6.85%), Adani Ports (5.93%), Bharti Airtel (5.44%) and HDFC (5.34%).
The currency extended its losses in afternoon trade. Earlier in the day, the rupee fell 29 paise to 79.42 level against the dollar as the greenback gained overseas. The domestic unit had ended 17 paise higher at 72.20 against the dollar on Friday on sustained selling of the American currency even as local equities witnessed a high volatility.
Meanwhile, brent crude oil price hit $80 per barrel mark in trade today. Aviation stocks were down 4-6 percent on the back of rise in oil prices.
While the BSE midcap index was down 2.41%, small cap index fell 2.75% in trade today.
“There are liquidity concerns … financial stocks led the rally and now they are dragging the markets and it has a domino effect on sectors such as real estate and autos,” said AK Prabhakar, head of research at IDBI Capital.
Indiabulls Housing Finance (INBF) fell 8.3 percent, while banking stocks such as ICICI Bank Ltd and State Bank of India Ltd lost between 1.7 and 1.9 percent.
“There is a lack of trust in the markets. Take the IL&FS case – when a AAA rated company is suddenly downgraded, how can people trust rating agencies,” said Prabhakar.
Auto and banking indices led the fall with the BSE auto index trading 908 points lower at 22,366 points. The BSE bankex too fell 645 points to 28,056 level.
Except the two IT indices, all 17 BSE sectoral indices were trading in the red.
Market breadth was negative with 434 stocks rising compared with 2150 stocks falling on the BSE.
Shares fell in Asia after China reportedly rebuffed a plan for talks with the US on resolving their dispute over trade and technology. The slow start to the week followed a mixed close Friday on Wall Street, where an afternoon sell-off erased modest gains for the S&P 500 that had the benchmark index on track to eke out its own record high for much of the day.
Hong Kong’s Hang Seng index fell 1.5 percent to 27,540 and Australia’s S&P ASX 200 edged 0.1 percent lower to 6,189. India’s Sensex gave up 0.8 percent to 36,537. Shares rose in Singapore but fell in Thailand and Indonesia. Markets in Japan, South Korea, Shanghai and elsewhere in the region were closed for national holidays.