Stocks slumped for the second straight session on Monday as lacklustre macroeconomic data and a rising trend in COVID-19 cases dented the risk appetite. The Nifty slipped below the 15,000-mark as it declined by 101.45 points (0.67%) to close at 14,929.5. The Sensex dived 397 points (0.78%) to 50,395.08. The markets were following a global selloff ahead of the Fed’s two-day meeting.
The markets had a gap-down opening and remained under pressure throughout the session owing to both domestic and global developments. Most of the merging markets fared poorly on Monday. According to Jefferies, the Indian markets were also among the worst performing markets in the previous week. They rose by 0.6% in the previous week which is 0.7% underperformance to emerging markets, according to Jefferies.
The Shanghai Composite, China’s benchmark, was down by 0.96% while Philippines PSEi fell 2.62% on Monday. The markets in Taiwan and South Korea were down by 0.04% and 0.28%.
The markets remained under pressure after a selloff globally as investors became wary ahead of the Fed’s FOMC meeting and with US Treasury yields touching a 12-month high of 1.62%. Moreover, lacklustre macroeconomic data dampened the sentiment.
Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said: “On the global front, US G-Sec yields spiked to 12-month high of 1.62% and continued to dampen sentiment. On the domestic side, February retail inflation surged to a three-month high while the WPI surged to 27-month high. This, along with an increase in Covid-19 cases, weighed on the market sentiment.” The markets however, recovered some of their losses towards the end of the session on account of buying in information technology as well as metal stocks.
Foreign portfolio investors on Monday bought stocks worth $146.84 million.
ICICI Securities has said the key risks for Indian equities are rising Covid-19 cases as well as a surge in oil prices. The brokerage said, “Rising Covid-19 cases in key industrial states like Maharashtra can slow down the nascent economic recovery, although availability of vaccines provides confidence of tackling the issue unlike the situation a couple of months ago…”