The stock market witnessed a bloodbath on 6 May with the Bombay Stock Exchange (BSE) Sensex tanking as many as 723 points, it second biggest single day fall since Narendra Modi government took over, on a huge sell-off by FIIs on concerns over GST and other reforms.
Concerns of reform process may get delayed triggered across-the-board sell-off as the GST bill was heavily opposed even as it got through the Lok Sabha. Slowdown in the services and manufacturing sectors and persistent taxation worries also added to the pressure.
Some traders said that conviction of Bollywood actor Salman Khan in a 13-year-old hit and run case may be responsible, as several HNI investors and traders typically rotate their funds between stock market, real estate and film industry.
“The traders were also concerned due to the conflict between the opposition and government over key bills in Parliament,” said Jayant Manglik, president, Retail Distribution at Religare Securities.
However, the Sensex succumbed to selling pressure and decreased below the 27,000-mark with blue-chip stocks ICICI Bank, ONGC, Cipla and ITC, among other plummeting. It touched a low of 26,677.64 before settling 722.77 points or 2.63 per cent lower at 26,717.37, the lowest in nearly 5 months.
This is the biggest day fall in the past four months. The past plunge was around 855 points on January 6. Besides, this is the second-biggest since Modi government took over on May 26, 2014.
The 50-share NSE Nifty crashed by 227.80 points or 2.74 per cent to close below 8,100-mark at 8,097.