Equity benchmark Sensex tanked 627 points to end below the 50,000 level on the last day of 2020-21 fiscal due to heavy profit booking in HDFC twins, RIL and Infosys but closed the financial year with a whopping 68 per cent rise.
The 30-share BSE index ended lower by 627.43 points or 1.25 per cent at 49,509.15 with 19 of its constituents ending in the red on Wednesday.
The broader NSE Nifty slumped 154.40 points or 1.04 per cent to close at 14,690.70.
During the financial year 2020-21, Sensex zoomed a massive 20,040.66 points or 68 per cent while Nifty skyrocketed 6,092.95 points or 70.86 per cent despite COVID-19 blues.
On the last day of FY21, HDFC Bank and HDFC were the top losers among Sensex stocks, a day after the private banking major admitted to some glitches in its online banking services. The bank, which has already faced the RBI penalty for disruption in online services, promised to resolve the issue and restore services. HDFC tanked 4 per cent while HDFC Bank declined 3.86 per cent on BSE.
Among other major losers, PowerGrid fell 2.71 per cent, Tech Mahindra by 2.5 per cent, ICICI Bank by 1.71 per cent, ONGC by 1.59 per cent, Kotak Bank by 1.5 per cent, Infosys by 1.28 per cent and Reliance Industries by 1.25 per cent.
On the other hand, ITC, Bajaj Finserv, HUL, SBI and TCS were among the gainers. Among sectoral indices, BSE finance, bankex, power, telecom, energy and teck fell up to 1.73 per cent, while realty, FMCG, consumer durables, basic materials and metals indices rose up to 1.89 per cent.
Broader midcap and smallcap indices outperformed benchmarks, rising up to 0.52 per cent.
"Domestic equities traded lower as concerns pertaining to spike in COVID-19 cases and resultant restrictions continued to weigh on investors’ sentiments," said Binod Modi, Head - Strategy at Reliance Securities.
As many as 53,480 fresh infections pushed India's COVID-19 tally to 1,21,49,335 while 354 new fatalities, the highest single-day spike so far this year, took the death toll to 1,62,468, according to Union health ministry data.
Further, a rise in US treasury yields and strengthening dollar index aggravated concerns, Modi added. Financials, especially private banks, witnessed heavy profit booking, which along with selling pressure in IT stocks dragged benchmarks. However, investors continue to lap up FMCG, metals and pharma names.
Meanwhile, the global oil benchmark Brent crude was trading 0.58 per cent lower at USD 63.80 per barrel.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended in the red following a weak closing in Wall Street amid reports that US President Joe Biden wants to spend over USD 2 trillion on infrastructure projects to push growth and create jobs, and would increase corporate tax to fund the spending.
Stock exchanges in Europe were also trading on a negative note in mid-session deals.
"Weak cues from across the globe forced the domestic market to shed yesterday’s optimism. US markets had a weak close after the US bond yield reached near its 14-month high level while European and Asian markets followed the trend. Private banks were the sectorial laggards due to selling seen in heavyweights. However, mid cap and small cap stocks remained in positive territory today," Vinod Nair, Head of Research at Geojit Financial Services said.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities also said that markets opened weak as Joe Biden would unveil his infrastructure package on Wednesday with an increase in corporate taxes.
On the performance of key indices in FY21, Joseph Thomas, Head of Research, Emkay Wealth Management, said it was the best performance in a decade.
“The key thing to note is the sharp drawdown witnessed towards the close of the preceding financial year. FY20 saw negative returns to the tune of 30 per cent. This is quite similar to the base that was created in FY09 when markets corrected by 40 per cent due to the global financial crisis. But that was swiftly followed by close to 80 per cent returns for FY10,” he said.
The fall in markets due to severe economic distress proved to be the best investment opportunity. The star performers among individual sectors were IT, pharma and banking, he noted.
