Benchmark indices ended the day sharply lower, on a day when most markets were up 1 to 3 per cent, as investors remained unimpressed with the economic package announced by the government. The belief is that most of the package was through a monetary stimulus, without any fresh money for more direct measures.
The Sensex ended the day lower by a massive 1,038 points, while the Nifty lost 314 points to end below the 9,000 points mark at 8,823 points.
Banking stocks plunged in trade, after the Finance Minister announced that the threshold to initiate insolvency proceedings were raised to Rs 1 crore from Rs 1 lakh earlier.
In a bid to give some relief to companies, which are likely to default on loans due to the Covid-19 stress, Finance Minister Nirmala Sitharaman on Sunday said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code. Also, coronavirus-related debt will be excluded from definition of default, which saw further selling pressure in banking stocks.
Bluechip banking names like HDFC Bank and ICICI Bank tumbled almost 5 to 7 per cent. NBFCs like L&T Finance Holdings and HFC like India Bulls Housing fell 7 and 9 per cent respectively.
Shares in Reliance Industries also dropped, even the company announced that General Atlantic will pick a stake in the company.
IT stocks ended the day firm with TCS and Infosys gaining more than 2 per cent each. The Bank Nifty fell almost 6.5 per cent in trade.