The benchmark indices were on course to fall for a third straight session on Wednesday.
The Sensex dropped over 200 points in early trade on Wednesday tracking losses in index-heavyweights ITC, Axis Bank and Kotak Bank amid rising concerns over the country’s economic outlook as COVID-19 cases spike.
The 30-share index was trading 256.76 points or 0.82 percent lower at 31,196.75, and the NSE Nifty fell 77.60 points, or 0.84 percent, to 9,128.
In the previous session, the BSE barometer settled 261.84 points or 0.83 per cent lower at 31,453.51, and the NSE Nifty fell 87.90 points or 0.95 percent to close at 9,205.60.
Shares in consumer goods conglomerate ITC and lender Axis Bank Ltd fell 6 percent and 3.8 percent, respectively, after a news report that the government is planning to sell its stakes in the two companies.
ITC was the top loser in the Sensex pack, tanking nearly 6 percent, followed by Axis Bank, Titan, Bajaj Auto, Maruti, M&M, L&T and IndusInd Bank.
On the other hand, Bharti Airtel, ONGC, NTPC, Reliance Industries and Tata Steel were among the gainers.
Oil manufacturing companies (OMCs) stocks were under pressure. The government on Tuesday evening hiked excise duty by a record Rs 10 per litre on petrol and Rs 13 per litre on diesel to garner Rs 1.6 lakh crore additional revenue as it repeated its time-tested formula of not passing on gains arising from a slump in international oil prices.
Retail prices of petrol and diesel will not be impacted by the tax changes as state-owned oil firms will adjust them against the recent fall in oil prices, industry officials said.
Foreign portfolio investors were net sellers in the capital market on Tuesday, as they offloaded equity shares worth Rs 1,059.39 crore, according to provisional exchange data.
According to traders, economic uncertainty due to the COVID-19 pandemic, muted corporate earnings and weak marcoeconomic data are keeping investors wary.
In India, the death toll due to COVID-19 rose to 1,694 and the number of cases climbed to 49,391, according to the health ministry.
Globally, the number of cases linked to the disease has crossed 36.63 lakh and the death toll has topped 2.57 lakh.
Rupee opens weak
Rupee slips 18 paise to 75.81 against US dollar in early trade.
#Rupee opens slightly lower Vs Tuesday’s close pic.twitter.com/X1VCZAnMQX
— CNBC-TV18 (@CNBCTV18Live) May 6, 2020
The rupee opened slightly weak.
US stock futures, Chinese shares slip amid Sino-US tensions
Shares struggled and the yen gained on Wednesday, with markets in China faltering on their return from a long holiday as investors fretted over Sino-U.S. tensions, while oil ended an extended winning streak on oversupply risks amid weak demand.
Wall Street futures turned negative after starting higher, with E-minis for the S&P500 off 0.3 percent, according to Reuters.
China, opening for the first time since Thursday, started on the backfoot with the blue-chip index .CSI300 down 0.6 percent. Australian shares skidded 0.8 percent.
“There is a distinct risk-off tone to greet China coming back from holiday,” said Stephen Innes, chief global markets strategist at AxiCorp.
“With Trump and the company still on the Wuhan Lab rampage, traders are incredibly cautious this morning, weighing all the possible China responses. And the one that would hurt the most would be for China to reduce imports of US oil.”
Global financial markets have been caught this month between grim economic figures and worries about worsening US.-China relations, and optimism over easing COVID-19 lockdowns in many countries.
International oil benchmark Brent crude futures were trading 0.36 percent lower at $ 30.86 per barrel.