Sensex sheds over 1,000 points, FPIs pull out more than `2,500 cr

Sensex and Nifty fell over

3.4 per cent to one-month lows on extension of the countrywide lockdown, a sharp rise in Covid -19 cases and the stimulus package failing to provide immediate relief expected by the market participants.

Despite gains in major Asian and the European markets on Monday, the Sensex shed 1068.75 points, or 3.44 per cent, due to heavy selling across the sectors, barring some IT and pharma blue chips.

The Sensex fell below the 30,000 level to an intra-day low of 29,968.45 but later closed at

30,028.98 while the NSE's

Nifty-50 closed at 8823, down 313.60 points, or 3.43 per cent.

Foreign portfolio investors were net sellers of equities worth Rs 2,512.82 crore while domestic institutions remained on the sidelines with net selling of equities worth Rs 152.42 crore.

Analysts say the extension of the lockdown is set to hurt the economy hard and a return to normalcy is three months away.

A report by Bank of America Merrill Lynch said, "In the near term, GDP will likely contract by 12 per cent in the June quarter and by 0.1 per cent in FY21. This assumes that the national lockdown is extended to June (with some relaxations) with the restart taking up to mid-August.

Bank and financial sector stocks were hit hard and the Nifty Bank and BSE Bankex indices were down by 6.69 per cent. Capital goods, realty, hotel and aviation stocks also fell sharply on lock down extension.

Top losers among the bank and financial services stocks on NSE were HDFC Bank (-5.65 per cent), SBI (-6.58 per cent), ICICI Bank (-6.85 per cent), Axis Bank(-7.04 per cent), Kotak Bank (-4.86 per cent), HDFC (-7.05 per cent) and Bajaj Finance (-6.78 per cent).