Sensex tumbles over 500 points, Nifty breaches 17,400 mark; metal stocks melt

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Domestic equity benchmarks ended near the day’s low amid a heavy sell-off on September 20. The Nifty closed below the 17,400 mark. Barring the FMCG index, all the sectoral indices on the NSE ended in the red. The S&P BSE Sensex, declined 524.96 points or 0.89% to 58,490.93. The Nifty 50 index lost 188.25 points or 1.07% to 17,396.90. The NSE’s India VIX, a gauge of the market’s expectation of volatility over the near term, surged 16.24% to 17.71.

In the broader market, the S&P BSE Mid-Cap index fell 1.79% while the S&P BSE Small-Cap index declined 1.84%. Sellers outnumbered buyers. On the BSE, 1036 shares rose and 2338 shares fell. A total of 133 shares were unchanged. Investors will continue to focus on the US Federal Reserve’s upcoming September meeting for clues on the central bank’s tapering of its easy monetary policy. Fed Chair Jerome Powell will hold a press conference on September 22 at the conclusion of the two-day meeting of the US Federal Reserve. Prospects of tighter US monetary policy and the Delta variant-induced slowdown in global economic growth coupled with possible corporate tax hikes worried the investor community

The Nifty Metal index slumped 6.80% to 5,297.35, extending losses for third day. The index has declined 9.59% in three sessions. Tata Steel (down 10%), Jindal Steel & Power (down 9.44%), National Aluminum Company (down 8.87%), SAIL (down 8.64%), NMDC (down 8.04%), Hindalco Industries (down 6.20%) and JSW Steel (down 7.59%) declined. Further, Vedanta (down 5.36%), Adani Enterprises (down 3.98%), APL Apollo Tubes (down 3.27%), Hindustan Zinc (down 3%), MOIL (down 2.52%), Coal India (down 1.63%) and Ratnamani Metals Tubes (down 1.08%) edged lower.

On September 17, the GST Council chaired by Finance Minister Nirmala Sitharaman gave its nod for increasing the GST on iron ore and manganese ore. It also approved raising GST on nickel, copper and zinc. The council gave its consent to increase GST on metals from 5% to 18%.

Global markets

The Asian market was mixed on Monday. Hong Kong’s Hang Seng index declined over 3% as shares of shares of embattled Chinese developer China Evergrande Group continued their decline.

Concerns that China’s second-largest property developer Evergrande could default on its debts is spilling over into China’s financial markets and even risks contagion that could spread to markets beyond China.

Markets in mainland China, Japan and South Korea are closed on Monday for holiday’s. US stocks dipped on Friday as investors remain cautious due to a resurgent Covid-19 virus and a historical tendency for September to be a weak month for equities.

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