Sensex Drops Nearly 700 Points After Budget Shock, Weighed Down by Auto, Bank Stocks
The S&P BSE Sensex declined 675.17 points, or 1.71%, to 38,838.22 at 1:58 pm, while the Nifty 50 was down 217.75 points, or 1.84%, to 11,593.40.
The stock market indices witnessed major selloff on Monday as an overhang of the Union Budget 2019, along with weak Asian markets, weighed down investor sentiment. The S&P BSE Sensex declined 675.17 points, or 1.71%, to 38,838.22 at 1:58 pm, while the Nifty 50 was down 217.75 points, or 1.84%, to 11,593.40.
All the sectoral indices were trading in the red. The capital goods index was the worst hit, down nearly 4%, followed by auto, power and banking indices, down by over 3% each.
Auto stocks took a beating as the budget didn’t introduce any new measures to help the ailing sector. Shares of country’s largest car maker, Maruti Suzuki India Ltd, hit over two-year low, falling over 6% in intraday trade to breach the Rs 6,000 mark for the first time since 30 March 2017. Tata Motors was down 3.5%, TVS Motors fell 3.7%, Hero MotoCorp declined 5.5% and Bajaj Auto slipped 3%.
Punjab National Bank (PNB) shares fell over 10% after the public sector bank detected a fraud of more than Rs 3,800 crore by Bhushan Power and Steel Ltd (BPSL) and reported it to the Reserve Bank of India (RBI). State Bank of India (SBI) was also down over 4%.
Yes Bank shares, however, jumped as much as 6.8% in early trade after the bank said the meeting of the board of directors will be held on 17 July to consider and approve the unaudited financial results of the bank for the quarter ended June 2019.
Mindtree shares also plunged over 14% after the IT firm's co-founders Krishnakumar Natarajan, N.S. Parthasarathy and Rostow Ravanan resigned on Friday, two days after Larsen and Tourbo (L&T) acquired controlling stake in the global IT services firm.
Overseas, Asian stocks fell sharply after a strong US jobs report lowered expectations of a rate cut by the US Federal Reserve in the upcoming policy meetings. China’s Shanghai Composite fell 3% while Hong Kong’s Hang Seng, Japan’s Nikkei and South Korea’s Kospi declined 1-2%.
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