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The first tranche of the Central government’s ₹20-lakh-crore financial package to combat the Covid-19-induced slowdown failed to enthuse stock market investors on Thursday.
Foreign portfolio investors (FPIs) sold stocks worth ₹2,152 crore in the cash segment on Thursday putting tremendous pressure on the markets. The Sensex fell by 2.77 per cent or 885 points to close at 31,122. The Nifty fell 2.57 per cent or 240 points to close at 9.142.
Retail and high net worth players bought stocks worth ₹146 crore on the BSE, provisional data showed.
The stock markets have been largely under pressure due to banking stocks. The fact that no major announcement came with regard to the banking sector saw the Bank Nifty index fall by 2.88 per cent or 540 points.
‘No demand stimulus’
“A large part of the fiscal package seems to have been exhausted with no demand stimulus. The total outlay/ estimated boost from today’s package is around ₹3-lakh crore. After accounting for yesterday’s ₹6-lakh-crore package and the estimated ₹10-lakh crore announced by the RBI and the government earlier, the ₹20-lakh-crore package is near exhaustion with little or no demand stimulus. Nevertheless, the actual hit to the fiscal deficit may be well contained to under ₹2-lakh crore across all the packages,” said Teresa John, economist, Nirmal Bang Institutional Equities.
“Overall, the announcement will provide much-needed relief to the market. What has come through will not disappoint the market, and it will also inch upwards and remain cheerful for the next few days,” said Amar Ambani, President and Institutional Research Head, Yes Securities.
“The silver lining for the markets is that the Sensex and Nifty have been making a pattern of higher bottoms and higher tops in the past few weeks. Also, on Thursday, while the Sensex and Nifty fell, the broader markets remained calm, and small and mid-cap stocks did not see heavy selling,” said Rohit Srivastava, Chief Strategist, Indiacharts.
The markets were also under pressure due to negative global sentiment. In the US, the Dow Jones index fell for the fourth straight day. On Wednesday, the Dow, and S&P fell by 2.2 per cent and 1.8 per cent, respectively, while the Nasdaq Composite lost 1.6 per cent.
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