Mumbai, June 17 : Investor sentiments were subdued on Wednesday as rise in Covid-19 cases and tensions at the border due to Indi-China row played dominantly in the market scenario which saw Benchmark equity indices closing at the day’s low level.
As many as 20 Indian soldiers were killed in a violent fight between the two countries in Galwan area of Ladakh on Monday night even as Prime Minister Narendra Modi said after the market hours on Wednesday that the sacrifice of Indian soldiers killed in the skirmishes would not go in vain and that India was committed to protect its territorial integrity and would not keep quiet if it was provoked by the neighbour.
Earlier in the day, Chinese Foreign Ministry spokesman Zhao Lijan said China should not be blamed for the clash and added that the overall situation at the border was stable and under control.
Benchmark Sensex which had gone up by 328 initially during the day declined 97 points to close at 33,508 while Nifty came down 33 points to register at 9881 at close.
Volatility index or India VIX rose for the fifth straight day today. It climbed 1.53 per cent to 33.47 sending a signal that it may witness a see-saw moments ahead.
Lenders contributed most to the Sensex’s decline. HDFC dropped by 1.58 per cent and private lenders HDFC Bank and Kotak Mahindra Bank also declined by 1.13 Per cent and 2.81 per cent respectively.
YES Bank dropped 2.64 per cent amidst reports that it may be planning a share sale of $1 billion. For the fourth day in succession, Shares of Lakshmi Vilas Bank went up five per cent as the Bank signed a non-binder Letter of Intent (LoI) with Clix Capital services and Clix Finance for a proposed Amalgamation of the Clix Group with the Bank.
Shares of Maruti Suzuki, Bharti Airtel and Axis Bank were among the top Sensex performers.
Market experts said that the day was full of indecisive trade with the Indo-China border dispute turning violent and resulting in benchmark indices becoming slightly negative at the close of the day.
Vinod Nair, Head of Research at Geojit financial Services said the losses were mainly due to financial stocks. Foreign Institutional Investors have also been net sellers in Equity this week which has had an impact in the markets. According to him, markets would continue to remain volatile for some time.
BSE power index was the biggest sectoral loser as it came down by 1.05 per cent. BSE Utilities index followed next with a 0.84 per cent decline. BSE finance index dropped 0.59 per cent.
FIIs have pumped in $2.4 billion in Indian Markets so far this month while domestic Institutional Investors have put in a net of 237.82 crores in the asset class.
HDFC Asset Management Company dropped by 4.85 per cent as one of its promoters Standard Life Investments offered for sale 60 lakh shares in the AMC, constituting 2.82 per cent of the total equity.
The border tensions also had an impact on tourism and hospitality sectors. Indian Hotels Co and Lemon Tree Hotels dropped 3.33 per cent and 4.87 per cent respectively.
However, Chalet Hotels recovered early losses and went up by 2.30 per cent.
Market experts feel that further developments on the Indi-China border front will be closely watched by the investors in near future. Moreover, rise in Corona cases is also impacting investor sentiments as the country’s health care system struggles to get back normalcy.
