Sensex cracks below 50,000 as investors take profits, virus worries weigh

The NSE Nifty 50 index ended 2.04% lower at 14,675.70, clocking its biggest one-day drop since Dec.21; PSU banks and IT worst hit

Broad-based losses pulled Indian shares lower on Monday as investors locked in profits in high-flying stocks, while news of fresh COVID-19 restrictions in parts of the country also weighed on sentiment.

Domestic equities rose sharply in the first two weeks of February thanks to solid corporate earnings and a well-received federal budget, but markets have pared some of those gains in recent sessions due to profit-taking.

The BSE S & P Sensex closed 1,145 points or 2.25 per cent down at 49,744 while the Nifty 50 edged lower by 306 points or 2.04 per cent to 14,676. Both the indexes finished lower for a fifth straight session.

Except for Nifty metal, which moved up by 1.6 per cent, all other sectoral indices at the National Stock Exchange were in the red with Nifty IT and realty down by 2.8 per cent each, PSU bank by 2.6 per cent, pharma by 2.5 per cent and auto by 2.2 per cent.

Among stocks, Eicher Motors crashed by 5 per cent to Rs 2,453 per share while Mahindra & Mahindra sank by 4.7 per cent to Rs 837.90. Maruti Suzuki skidded by 3.3 per cent to close at Rs 7,087.15 per share.

Tech Mahindra lost by 4.6 per cent, Dr Reddy's by 4.4 per cent, Axis Bank by 4 per cent, IndusInd Bank by 3.9 per cent and SBI Life by 3.8 per cent. Index heavyweight Reliance Industries dipped by 3.8 per cent and wound up the day at Rs 2,000.10 per share.

However, metal stocks gained substantially with JSW Steel up by 2.3 per cent, Hindalco by 2 per cent and Tata Steel by 1.4 per cent. Besides, Adani Ports, ONGC, HDFC Bank, Britannia, Hero MotoCorp and Asian Paints traded higher.

Meanwhile, Asian share markets inched up as expectations for faster economic growth and inflation globally boosted commodities.

Japan's Nikkei recouped by 0.46 per cent but Hong Kong's Hang Seng index fell by 1.06 per cent on policy tightening fears.

India's COVID-19 outbreak has slowed sharply since daily cases hit a peak in September, but a resurgence in infections in Maharashtra has forced fresh restrictions and spurred fears of a second wave of the disease.

"There is a round of profit-booking that is still happening ... valuations remain high and we are seeing a consolidation," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities in Mumbai.

"The rise in bond yields and news of fresh COVID-19 restrictions are factors that are adding to investor worries ... Until there is more clarity on how the situation evolves, people are booking some gains."

MSCI's All Country World Index was down 0.4% on Monday as expectations for faster economic growth and inflation globally battered bonds and boosted commodities.

In domestic trading, Reliance Industries closed down 3.5% and was the biggest drag on the indexes after India's top court barred a final ruling by a tribunal reviewing the conglomerate's deal to buy Future Group's retail assets.

The Nifty metal index was the only sub-index in positive territory, adding as much as 3.2% as copper prices rose on hopes of a pick-up in demand.

Investors also await the minutes of the February monetary policy meeting due later in the day.