Mumbai: Bearish trends ruled equity market on Monday with Sensex plunging nearly 800 points amid heavy selling pressure after the Union Budget for 2019-20 announced measures to tax share buybacks and increase minimum public shareholding in listed companies.
According to reports, the panic selling in the past two trading sessions wiped out Rs 5 lakh crore of investors' wealth. Auto and PSU bank stocks were the worst sufferers. When the closing bell rang, the BSE S&P Sensex was down 793 points or over 2% at 38,721 while the Nifty 50 dropped 253 points to 11,559.
All sectoral indices at the National Stock Exchange (NSE) were in the red with Nifty PSU bank plunging 5.9%. Nifty realty skidded 3.5%, auto by 3.2% and financial services by 2.9%.
Panic selling weighed in after the Punjab National Bank (PNB) reported a fraud of Rs 3,800 crore by Bhushan Power and Steel, saying the company misappropriated bank funds and manipulated books of accounts to raise funds from the consortium lender banks. PNB closed 11% lower at Rs 72.80 per share while the State Bank of India was down over 4.1% at Rs 355.25 apiece.
The Budget increased minimum public shareholding in listed companies to 35% from 25% which could lead to a wave of new issuance. Investors also turned cautious ahead of the earnings season. Bajaj Finserv shed 10% while Bajaj Finance was down 7.7%, ONGC by 5.6%, ONGC by 5.6% and NTPC 5.3%.
Heavy selling pressure was seen in auto stocks due to the absence of any conspicuous impetus in the Budget for the beleaguered sector. Hero Motorcorp was down 5.2%, and Maruti Suzuki by 5.1%. However, YES Bank was up 5.6% after it announced the appointment of two senior management leaders and said the bank's financial position is sound and stable.
Other which showed gains were Bharti Infratel, JSW Steel and IT stocks like HCL Tech, Tata Consultancy Services, and Tech Mahindra. Meanwhile, Asian shares were broadly weaker after tracking Wall Street which fell from record highs last week.
Investors turned their attention to the upcoming testimony from US Federal Reserve Chairman after a strong jobs report cast doubt on the pace of interest rate cuts. Share sentiment was also dampened by US investment bank Morgan Stanley's decision to reduce its exposure to global equities due to misgivings about the ability of policy easing to offset weaker economic data.
