5 Reasons Why Sensex and Nifty Plunged Over 3% Today

Mon, 21 Dec Closing

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Indian share markets witnessed heavy selling pressure during closing hours, pausing the record rally, with all sectors reeling under strong pressure.

At the closing bell, the BSE Sensex stood lower by 1,407 points. Meanwhile, the NSE Nifty ended down by 432 points.

Both the benchmark indices erased all the gains made in the previous six days. The Sensex touched a low of 44,923, while the Nifty fell to 13,131.

ONGC and Tata Motors were among the top losers today.

SGX Nifty was trading at 13,262, down by 498 points, at the time of writing.

On the sectoral front, metal stocks, realty stocks and oil & gas stocks were among the hardest hit.

Asian stock markets ended on a mixed note. As of the most recent closing prices, the Hang Seng was down 0.7% and the Shanghai Composite stood higher by 0.8%. The Nikkei ended down by 0.2%.

US stock futures are trading lower today indicating a negative start for Wall Street indices.

Nasdaq Futures are trading down by 58 points (down 0.5%), while Dow Futures are trading down by 266 points (down 0.9%).

The rupee is trading at 73.79 against the US$.

Here are Top 5 Factors Why Indian Stock Markets Plunged Today

Renewed Covid-19 Fears: A new variant of the novel coronavirus has been identified in the United Kingdom. England's Chief Medical Officer Chris Whitty said on December 19 that the new variant of the coronavirus can spread faster.

The variant is thought to be up to 70% more transmissible than the original strain of the disease. The World Health Organization said it has so far been identified in Denmark, the Netherlands and Australia.

Prime Minister Boris Johnson said the infectiousness of the new strain had forced him into locking down much of England over the Christmas period.

Travel Restrictions: Prime Minister Boris Johnson was to chair a crisis meeting today as a growing number of countries blocked flights from Britain over a new highly infectious coronavirus strain the UK said was "out of control".

More than a dozen European nations have already banned flights and travellers from Britain, with more expected to take action.

Aviation stocks came under pressure tracking above news, with SpiceJet and InterGlobe Aviation falling more than 9%.

Weak Global Cues: Asian stock markets fell today amid concerns over the new coronavirus strain that shut down much of the UK. Japan's Nikkei reversed early gains to end 0.4% lower, off its highest since April 1991.

European share markets also plunged as investors monitored a fast-spreading new variant of the coronavirus.

Fallout in Brexit Negotiations: Britain insisted on Sunday the European Union should shift position to open the way to a post-Brexit trade pact, prompting the bloc's negotiator to defend the union's right to protect its interests.

Profit Booking: Share market succumbed to profit-booking as valuation is near-record high.

Our editors have been pointing out for many weeks now about the risky nature of the market as Covid-19 remains an overhang and the economic outlook remains uncertain.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

In news from the commodity space, gold imports, which have a bearing on the current account deficit, fell 40% to US$ 12.3 billion during April-November due to fall in demand in the wake of the Covid-19 pandemic, according to data from the commerce ministry.

Imports stood at US$ 20.6 billion in the corresponding period of 2019-20.

The imports, however, recorded a year-on-year (YoY) growth of 2.65% in November to US$ 3 billion.

Silver imports during April-November 2020 too dipped 65.7% to about US$ 752 million.

Gems and jewellery exports declined by 44% to US$ 14.3 billion during the first eight months of the current fiscal.

Reports stated that the decline in gold and silver imports has helped in narrowing the country's trade deficit to US$ 42 billion during April-November 2020-21 as against US$ 113.42 billion in the year-ago period.

Domestic gold and silver prices surged in early trade today tracking firm global rates. On MCX, February gold futures jumped 1.4% to one-month high of Rs 51,009 per 10 gram while silver futures surged 5.4% or Rs 3,600 to Rs 71,549 per kg.

However, gold erased gains as the session progressed and fell 0.2% to Rs 50,200 per 10 grams.

In global markets, gold prices jumped after top US lawmakers agreed on a US$ 900 billion Covid-19 economic relief package after months of battling and posturing.

However, a stronger US dollar capped further gains in gold. The dollar climbed as the worsening pandemic and lack of progress on Brexit trade talks sapped risk appetite despite an agreement on a US stimulus package.

Speaking of the precious yellow metal, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

Even with the recent volatility in prices, gold remains among the best performing commodities this year to combat the fallout from the coronavirus pandemic.

In his latest video, India's #1 trader, Vijay Bhambwani shares his view on gold and silver for the coming year.

In the video, Vijay explains the reasons behind staying positive on these assets.

Tune in here to find out more:

And to know more about gold, you can check out our detailed article on investing in gold here: How to Invest in Gold?

In latest developments from the IPO space, the initial public offering (IPO) of Antony Waste Handling Cell has been subscribed 1.08 times on December 21, the first day of the bidding, supported by retail investors.

The Rs 3-billion public issue received bids for 7.3 million equity shares against reduced offer size (due to anchor book) of 6.7 million shares, the subscription data available on exchanges showed.

Qualified institutional buyers (QIB) have not started putting their bids yet. As per the norms, to get any public issue subscribed fully, the QIB portion has to subscribe at least 90%.

The retail portion received subscription of 2.2 times and that of non-institutional investors 3.8%.

How this IPO sails through remains to be seen. Meanwhile, we will keep you updated on the latest developments from this space.

Moving on to stock specific news...

Shipping Corporation was among the top buzzing stocks today.

Shares of the company rose 7% in early trade today and hit a 52-week high on reports that the government may invite expressions of interest (EoI) for the company this week.

According to reports, the government is likely to invite bids this week for the privatization of the company, with buyers getting time till mid-February to submit their EoIs.

The government is planning to sell its entire 63.75% stake in Shipping Corporation, along with transfer of management control.

Note that shares of the company has zoomed as much as 75% in the past one month on reports that global and domestic players are making a beeline for privatization process for the company.

During initial discussions, players like Essar Shipping, Adani, Great Eastern Shipping, Vedanta, and Dubai Port World have expressed interest in SCI, reports suggested.

Shipping Corporation share price ended the day down by 4.6%.

Apart from the above, market participants were also tracking Valiant Organics share price.

Shares of Valiant Organics gained 4% in early trade today, ahead of turning ex-date on Thursday, December 24, 2020 for its 1:1 bonus issue.

The Company has fixed December 28, 2020 as the 'Record Date' to determine the eligible shareholders entitled to receive the bonus shares.

The board of directors of the company on November 13, 2020 had recommended the issue of bonus shares in the ratio of 1:1.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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INDICESBSE (Rs 0 to 1)BSE (Rs 1 to 2)BSE (Rs 2 to 4)BSE (Rs 4 to 10)BSE (Rs 10 to 20)BSE (Above Rs 20)BSE - AllBSE-30BSE-100BSE-200BSE-500BSE AutoBSE BankexBSE Capital GoodsBSE Consumer DurablesBSE FMCGBSE HealthcareBSE ITBSE MetalBSE Oil & GasBSE PSUBSE TeckBSE RealtyBSE PowerBSE A GroupBSE B GroupBSE Mid-CapBSE Small-CapBSE Basic MaterialsBSE Consumer DiscretionaryBSE IndustrialsBSE UtilitiesBSE Sensex 50BSE Sensex Next 50BSE Bharat 22BSE 150 MidCapBSE 250 SmallCapBSE 250 LargeMidCapBSE 400 MidSmallCapBSE AllCapBSE LargeCapBSE SmallCap SelectBSE 100 LargeCap TMCBSE InfraBSE ManufacturingBSE CPSEBSE Private BankBSE Diversified FinancialsBSE MomentumBSE Low VolatilityBSE QualityBSE Enhanced ValueBSE Divident StabilityS&P BSE IPOBSE SMEIPOBSE 100 ESGBSE CarbonexBSE GreenexNSE (Rs 0 to 10)NSE (Rs 10 to 20)NSE (Above Rs 20)NSE - AllNSE-50NSE ITNSE Nifty Midcap 50NSE JR. NiftyNSE Bank NiftyNIFTY Next 50NIFTY 100NIFTY 200NIFTY 500NIFTY MidCap 100NIFTY SmallCap 250NIFTY SmallCap 50NIFTY SmallCap 100NIFTY LargeMidCap 250NIFTY MidSmallCap 400NIFTY AutoNIFTY Consumer DurablesNIFTY FinanceNIFTY FMCGNIFTY MediaNIFTY MetalNIFTY PharmaNIFTY Private BankNIFTY PSU BankNIFTY RealtyNIFTY Oil & GasNIFTY SME EmergeNIFTY CommoditiesNIFTY CPSENIFTY EnergyNIFTY India ConsumptionNIFTY InfraNIFTY MNCNIFTY PSENIFTY Serv SectorNIFTY100 Liquid 15NIFTY Midcap Liquid 15NIFTY Midcap 150 Quality 50NIFTY50 Equal WeightNIFTY100 Equal WeightNIFTY100 Low Volatility 30NIFTY100 Alpha 30NIFTY Alpha 50NIFTY Dividend Opportunities 50NIFTY High Beta 50NIFTY Low Volatility 50NIFTY200 Quality 30NIFTY 500 Value 50NIFTY 100 Quality 30SECTORSAgricultureAirlinesAluminiumAsset Management CompaniesAutomobilesAuto AncillariesBanks (Private)Banks (PSU)BankingCementChemicalsDefenceDiagnosticsDronesEngineeringElectric VehicleElectric Vehicle BatteryEnergy SourcesESGEthanolFertilizersFintechFMCGFoodGreen HydrogenHotelsInfrastructureInsuranceInvestment and FinanceInvITIT (Large)IT (Others)LogisticsMediaMetalMiningIndia's Big Tech StocksIndian PharmaMNC PharmaPSUPaintPaperPlasticPowerRating AgenciesReal EstateREITsRenewable EnergyRetailingSemiconductorShippingSteelSugarSupply ChainTelecomTextilesTravel Support Services

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