India’s share market fell dramatically on Monday, owing to concerns about the new HMPV virus, continued selling by foreign institutional investors (FIIs), and weaker global cues.
The Sensex closed 1,258.12 points, or 1.59% lower, at 77,964.99, while the Nifty slid 388.70 points, or 1.62%, to 23,616.05. During intraday trading, the two indices fell to 1.88%. The swift sell-off wiped out more than Rs 12 lakh crore from investors’ accounts, as the market capitalisation of all BSE-listed firms plunged the most in a single day in three months. The market capitalization fell to Rs 438.95 lakh crore after the close of Monday’s session.
“The market today experienced a decline and entered a state of panic, primarily due to the detection of a case of human metapneumovirus (HMPV) in Bangalore. This virus, a type of respiratory illness, has the potential to disrupt businesses, and logistics, and even lead to partial lockdowns, similar to the impact of COVID-19,” said Anand K. Rathi, Co-Founder of MIRA Money.
Narendra Solanki, Head of Fundamental Research- Investment Services at Anand Rathi Shares & Stock Brokers, stated that HDFC Bank and other big firms delivered headline statistics that fell short of market expectations, heightening concerns about the impending third-quarter results season.
“These disappointing figures come amidst an already weak global macroeconomic environment, marked by heightened uncertainties and challenges. Adding to the pressure, the emergence of a new HMPV virus variant has further unsettled investors, sparking fears of potential disruptions,” said Solanki.
According to experts, all of these issues have a negative impact on near-term market sentiment. The market was further weakened by ongoing FII outflows, with net sales of Rs 4,285 crore on Friday. The exodus coincides with the devaluation of the Indian rupee. Global indications have also become negative, as Federal Reserve officials have taken a hawkish attitude on potential rate decreases.
Tata Steel, NTPC, Kotak Mahindra Bank, IndusInd Bank, Power Grid, Zomato, Adani Ports, Asian Paints, Mahindra & Mahindra, and Reliance Industries were among the Sensex 30’s biggest laggards. Fifteen Sensex stocks plummeted more than 2% on Monday.
In the broader market, the Nifty Smallcap100 and Nifty Midcap100 indices fell by 2.70% and 3.20%, respectively. All sectoral indices closed in the red, with Nifty PSU Bank down 4%.
Check Experts Opinion
Santosh Meena, Head of Research, Swastika Investmart:
The Indian equities markets are down sharply today, with both the Nifty and the Bank Nifty falling below their 200-day moving averages. The sell-off can be ascribed to an increase in foreign institutional investor selling and concerns about the forthcoming third-quarter results season. Furthermore, suspicions about the new HMPV virus have fueled pessimistic sentiment, prompting further rounds of selling following the recent counter-trend retreat rise. The overall market structure appears to be poor, yet there is still hope for bulls. One important factor is a lack of consistent follow-through in either direction, indicating some degree of hesitation. Furthermore, the Nifty and Bank Nifty are currently trading at their critical support levels of 23,500 and 49,700, respectively, which may bring some relief to bulls.
Vinod Nair, Head of Research, Geojit Financial Services:
Emerging markets are consolidating due to uncertainty around new US economic plans, the Fed’s hawkish stance on future rate cuts, a probable upward revision to CY25 inflation, and a strong currency, all of which are weighing on market sentiment. Concerns about the human metapneumovirus appear to be the principal driver of a rapid sell-off in the home market. Furthermore, the initial Q3 consensus earnings estimate indicates a possible gradual recovery in domestic corporate earnings, which could explain the domestic market’s underperformance compared to overseas markets driven by premium valuation.
