4 Reasons Why Sensex Plunged 870 Points Today

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Indian share markets witnessed huge selling pressure today and ended deep in the red.

Benchmark indices registered sharp losses as a record single-day jump in Covid-19 cases dragged share markets lower and the volatility indicator shot up amid selling across sectors.

At the closing bell, the BSE Sensex stood lower by 870 points (down 1.7%).

Meanwhile, the NSE Nifty ended down by 229 points (down 1.5%).

Bajaj Finance and IndusInd Bank were among the top losers today.

SGX Nifty was trading at 14,716, down by 276 points, at the time of writing.

The BSE Mid cap index and the BSE Small cap index ended down by 1.1% and 1%, respectively.

On the sectoral front, finance stocks, banking stocks and realty stocks were among the hardest hit.

Asian share markets ended on a positive note today. The Shanghai Composite and the Hang Seng ended higher by 0.5% and 1.9%, respectively.

US stock futures are trading positive today with the Dow Jones Futures trading up by 222 points.

The rupee is trading at 73.32 against the US$.

Gold prices for the latest contract on MCX are trading down 0.2% today at Rs 45,326 per 10 grams.

Here are Top 4 Factors Why Indian Stock Markets Were Down Today:

Spike in Covid-19 Cases: A sharp rise in Covid-19 cases are posing a serious threat to the economic recovery of the world.

Rising number of cases in India amid second wave is dampening the stock market sentiment.

India reported 1,03,558 new COVID-19 cases, 52,847 discharges, and 478 deaths on Sunday, as per the Union Health Ministry.

Many Indian states have announced restrictions on human gatherings and the threat of a complete lockdown looms.

Earnings and RBI Monetary Policy: Market participants were also cautious as they await the RBI monetary policy committee's (MPC) outcome and Q4 earnings of various companies to get cues for the stock markets.

Sectoral Losses: Barring the IT sector, all indices ended their day in the red today. Most of the selling pressure was seen for banking and finance sector which ended their day lower by 3.4% and 3.3%, respectively.

Profit Booking: Apart from the above, losses were also seen as share market succumbed to profit-booking.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report talks about his stock trading strategy, in his latest video for Fast Profits Daily.

Tune in here to find out more:

Moving on to the news from IPO space...

Indian firms managed to raise Rs 310 billion through initial public offers (IPOs) in FY21.

In FY21, 30 Indian companies raised more than Rs 310 billion via equities despite the pandemic driven economic hardships. This also marks the highest fund raising through IPOs in last three years.

In FY20, companies raised Rs 203.5 billion through 13 IPOs.

Ample liquidity and strong upward rally in the stock market helped companies to achieve such record amount of funds through equities.

According to an analysis of data available with the stock exchanges, out of the 30 IPOs launched during the year, 18 were subscribed more than 10 times while four IPOs were subscribed by more than three times.

Companies from diverse sectors like jewellery, technology, specialty chemicals, banking, and financial services made their debut in the previous fiscal year (FY21).

The biggest IPOs of FY21 were Gland Pharma Ltd - Rs 64.8 billion, Indian Railway Finance Corp (IRFC) - Rs 46.3 billion, Computer Age Management Services Ltd (CAMS) - Rs 22.4 billion, and UTI Asset Management - Rs 21.6 billion.

The retail section for these IPOS witnessed huge volume in terms of applications received. Indigo Paints became the most subscribed IPO by receiving 2.6 million applications followed by MTAR Technologies at 2.5 million and Mazagon Dock at 2.4 million.

According to a leading financial daily, the IPO pipeline will remain strong in FY22 with 28 companies waiting for stock market regulator approval to raise nearly Rs 287.1 billion through primary markets.

We will keep you posted on all the developments that are about to take place in the IPO space. Stay tuned.

Moving on to stock specific news...

HDFC Bank was among the top buzzing stocks today.

Private lender HDFC Bank has announced double digit growth in advances and deposits in FY21.

The lender reported its advances have grown by 13.9% to about Rs 11,320 billion as of 31 March 2021 as compared with Rs 9,937 billion reported on 31 March 2020.

As per regulatory (Basel 2) segment classification, domestic retail loans as of 31 March 2021 grew by around 7.5% over 31 March 2020 and around 5% over 31 December 2020.

Domestic wholesale loans as of 31 March 2021 grew by around 21% over 31 March 2020 and around 4.5% over 31 December 2020, the bank said.

Bank deposits have grown by about 16.3% to approximately Rs 13,350 billion since 31 March 2021 as compared to Rs 11,475 billion year-on-year (YoY).

HDFC Bank's CASA ratio (current and savings account ratio) rate stands approximately at 46% from 31 March 2021 as compared to 42.2% from 31 March 2020 and 43% from 31 December 2020.

At the end of Q4FY21, the lender purchased loans aggregating up to Rs 75.03 billion through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation Limited (HDFC).

HDFC Bank share price ended the day lower by 2.4% on the BSE today.

Speaking of the lender, note that HDFC Bank is one that has always adapted to changing times.

HDFC Bank wanted to transform itself from a leader in the physical banking to a leader in online banking. Since then, HDFC Bank has constantly focused on going digital.

In 2004, only 10% of customer transactions were initiated through internet and mobile. The same number went up to 92% in 2019.

It is a great example of a company which has taken advantage of its scale and embraced disruption rather than fear it.

These are traits that one should look for in picking stocks. They not only withstand the disruption but also gain from it in the long-run.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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