MUMBAI: Indian benchmark indices fell sharply on Monday, wiping out 47.5 billion U.S. dollar of investor wealth as the government initiative of stimulus package failed to galvanize the market sentiment.
Bombay Stock Exchange benchmark index, Sensex closed at 30,029 points, down 3.4 percent while National Stock Exchange Nifty index closed at 8,823 points, down 3.4 percent from the previous close on Friday, reports Xinhua.A series of announcement over the past four days that concluded on Sunday by India's Finance Minister to revive the economy from the crisis of novel coronavirus fell short of market expectations as experts believed that the stimulus package lacked measures to boost demand and consumption in the short run.
"With the stimulus package announced by the government, not seen as adequate considering the need of the hour and with infections continuing unabated, the markets ended down by around 3.4 percent, in spite of positive global cues. Most measures may be seen as a long-term positive and markets were more worried about the immediate impact of these measures. With concerns about rising NPAs, financials were most affected. Uncertainty is likely to continue impacting the market performance," said Vinod Nair, head of Research at Geojit Financial Services, a domestic stock brokerage house.
A blanket suspension on initiating Insolvency and Bankruptcy code process announced by the finance minister is expected to impact asset preservation and severe erosion in recovery to Indian lenders, experts said.
The strength in U.S. dollar and weakness in domestic equities along with concerns about widening of the fiscal deficit, due to the recent stimulus package, paved the way for decline in the domestic currency.