Nifty Closes Below 11,000 After A Gap Of Over 2 Months

Stock markets plunged on Wednesday amid weakness, extending their losses to a fifth straight session. The BSE benchmark index Sensex plunged 536 points, or 1.5 per cent, to close at 36,305, while the NSE Nifty dropped 168 points, or 1.6 per cent, to end at 10,974. The 50-scrip index registered its biggest single-day percentage loss since March 16. It had last closed below the 11,000 mark on July 19. Weakness across banking, financial services, auto and consumer goods stocks dragged the markets lower. However, strong gains in IT shares limited the downside. Monday's decline came despite assurance from the government that it would provide adequate liquidity to mutual funds and non-bank financial companies.

Here are 10 things to know about Monday's trading session:

1. Forty one stocks on the Nifty 50 finished the session lower. Top laggards on the index were Indiabulls Housing Finance, Eicher Motors, Mahindra & Mahindra, HDFC and Bajaj Finance - closing between losses of 6 per cent and 7 per cent.

2. The Nifty Bank and Nifty Financial Services - the NSE's sectoral indices comprising banking and financial services stocks respectively - closed 2.6 per cent and 3.6 per cent lower. 

3. "There are liquidity concerns... financial stocks led the rally and now they are dragging the markets and it has a domino effect on sectors such as real estate and autos," news agency Reuters cited AK Prabhakar, head of research at IDBI Capital, as saying.

4. On the other hand, Dewan Housing Finance (DHFL) shares - which nearly halved in value on Friday after a credit rating agency downgraded IL&FS's non-convertible debentures - closed 12 per cent higher, after the company clarified that it had no exposure to IL&FS Group.

5. IT stocks rose sharply with the Nifty IT finishing 2.3 per cent higher. Heavyweights TCS, Infosys and Tech Mahindra closed between 1.4 per cent and 5 per cent higher, amid fresh weakness in the currency. Infibeam shares finished 22.2 per cent higher.

6. The rupee declined against the US dollar, to touch an intraday low of 72.49. Rupee depreciation augurs well for exporters such as IT companies, as it boosts their profitability. The rupee is down more than 13 per cent against the greenback so far this year. 

7. Finance Minister Arun Jaitley said in a tweet that the government "will take all measures to ensure that adequate liquidity is maintained/provided to the NBFCs, the mutual funds and the SMEs". His comments came a day after the central bank and capital market regulator Sebi assured investors they were monitoring the situation in the market and would take necessary steps.

8. The government is likely to impose higher import duties on precious stones, certain types of steel and electronics but will spare gold to prevent smuggling, Reuters cited a finance ministry official as saying. The government is trying to curb imports of "non-essential" items to support the rupee.

9. The Sensex has shed 1,785 points, or 4.7 per cent, in five consecutive sessions while the Nifty has lost 540 points.

10. Analysts will watch out for the outcome of the US Federal Reserve's two-day policy meeting that begins on Tuesday.

(With agency inputs)