Mumbai: Bears were in charge of the Dalal Street on Monday, as they ignored firm global equities, and were weighed down by disappointing factory data and fear of extension of loan moratorium for hospitality sector.
Continuous rapid rise in new Covid-19 infections, and concerns over expensive valuations also bothered investors.
Benchmark Sensex shed 667 points to close at 36.940 points, while peer Nifty dropped 174 points to close at 10,900 points.
Here are the key factors behind the market slump:
Fears of further loan extension: Finance Minister Nirmala Sitharaman said her ministry was working with the Reserve Bank of India (RBI) on restructuring of loans and extension of moratorium on term loans for the hospitality sector.
Fall in Reliance, financial stocks: Oil-to-telecom conglomerate Reliance Industries (RIL) was down 1.86 per cent and contributed more than 120 points to Sensex’s fall. Financials dragged lower too on concerns the loan moratorium may be extended.
Rapid surge in Covid-19 cases: India recorded more than 50,000 coronavirus cases for a fifth consecutive day, taking its tally way past the 18,00,000 mark. India's death toll now stands at 38,201. Home Minister Amit Shah and Karnataka CM B S Yediyurappa were reported to be among prominent political leaders who have tested positive for coronavirus
Factory data disappoints: India's manufacturing slump worsened in July as selective renewed lockdown measures to contain the surging coronavirus cases raised the likelihood of a sharper economic contraction.
The Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, fell to 46.0 last month from 47.2 in June, below the 50-level separating growth from expansion for a fourth straight month and marking its longest spell of contraction since March 2009.
Expensive valuations: The recent rally from March lows, has been largely liquidity driven and has been in sync with the world equities, as major central banks adopted an easy monetary policy. There are concerns the Indian markets may have run ahead of fundamentals.
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24 Comments on this Story
Suresh Vanwari55 days ago
These media guys dance as per the tune of the market. They themselves don't know what is the next step or in this point nobody knows what will happen. Their views keep changing like daily news paper. In short Market makes its own moves.
RajTill 55 days ago
This is called men of all seasons and reasons... so never invest on experts views
Sandeep55 days ago
Media has all reason...when market goes up and down .. tomorrow if there is a short covering..they will again give same reason...I don't understand how the views gets changed daily.