Sensex starts FY21 deep in the red, sheds 1,203 points; Nifty below 8,300

Mumbai: Benchmark equity indices continued their journey downwards on the first day of the fiscal year 2021, in sync with the selloff in world equities. Rising count of coronavirus patients in the country along with dismal auto sales numbers accentuated investor concerns.

BSE’s 30-share Sensex dropped 4.08 per cent or 1,203 points to close at 28,265, while NSE’s 50-share Nifty shed 3.89 per cent or 334 points to close at 8,264.

The sell off wiped off Rs 3.21 lakh crore from the market capitalization of BSE-listed companies.

India's coronavirus count rose sharply to 1,627 today with over 200 cases reported across the country in last 24 hours, latest data from healthy ministry showed. The death toll from Covid-19 rose to 38.

Relentless selling by foreign institutional investors is also hurting the market heavily. Foreign portfolio investors (FPIs) pulled a record $15.9 billion or Rs 1.2 lakh crore out of the Indian debt and equity markets in March--the most in Asia--according to NSDL data.

Market at a glance
The market breadth was neutral with gainers and losers nearly equal in number.

In the broader market, the fall was not as steep. BSE Midcap and BSE Smallcap indices dropped 2.18 per cent and 1.06 per cent, respectively.

Even as the market tumbled, India Vix plunged and shed 6.03 per cent to 60.52, hinting the volatility may ease in days to come.

BSE IT index was the top sectoral loser as it shed 5.58 per cent. Tech Mahindra and Mindtree were top losers in the IT pack, falling 9.46 per cent and 9.28 per cent, respectively.

BSE Auto index skid 1.54 per cent as most auto companies reported a sharp drop in sales, mainly because showrooms and factories have been shut due to lockdown.

Top car maker Maruti Suzuki pulled back 1.03 per cent as it reported a 47 per cent drop in total sales for March at 83,792 units .

As many as 26 of 30 Sensex stocks closed lower with IT stocks and financials contributing the most to the benchmark index's losses.

Top IT companies Tata Consultancy Services (TCS) and Infosys shed 5.94 per cent and 5.75 per cent, respectively. Private lenders HDFC Bank and Kotak Mahindra Bank shed 3.71 per cent and 8.78 per cent, respectively.

Hero MotoCorp and Bajaj Auto were the top gainers in the 30-pack Sensex.

Analysts’ views
"The first day of the financial year started off on a negative note, impacted by the negative global markets and also domestic uncertainties with regards to banks' stressed assets and auto numbers. FIIs have net sold around Rs 62,000 crores in equity in March and with virus infections increasing, markets are anticipating a worsening of the situation."
- Vinod Nair, head of research at Geojit Financial Services

“Markets continue to remain volatile with continued selling pressure seen after any meaningful rally. We believe the trend for the medium term remains negative with possibility of the index testing 7,500-7,700 levels going ahead. Expect volatility to remain high for an extended time period. FMCG stocks trade with a positive bias while other major frontline and midcap stocks continue to remain under pressure."
- Sahaj Agrawal, head of research- derivatives at Kotak Securities

Global markets
Asian and European shares fell on Wednesday in their first trading session of the quarter, as disappointing economic data from Asia underpinned the ongoing damage from the coronavirus pandemic and fanned fears of a deep global recession.

The pan-European STOXX 600 index was down 2.4 per cent.

MSCI’s broadest index of Asia-Pacific shares outside Japan erased gains to trade 0.33 per cent lower.