Sensex drops 108.03 points to 40,517.48 in opening session; Nifty at 11,891.85

MUMBAI: Indian stock markets on Wednesday opened on a muted note, halting a rally that extended to nine straight days, a day after the International Monetary Fund said India is headed for the biggest slump of any major emerging nation.

The S&P BSE Sensex index fell 108.03 points to 40,517.48 in the opening session - the weakest level recorded in early deals. The broader NSE Nifty 50 benchmark dropped to as low as 11,891.85, down 42.05 points - or 0.35 per cent - from its previous close.

Lowering its forecast for India, the IMF said the country's economy will contract 10.3 per cent this year because of the coronavirus pandemic - its biggest contraction since independence.

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On Tuesday, the equity benchmarks Sensex and Nifty ended marginally higher after choppy trade, propped up by RIL and IT stocks amid lacklustre cues from the global markets.

Rising for the ninth session in a row, the 30-share BSE Sensex ended 31.71 points or 0.08 per cent higher at 40,625.51.

Similarly, the broader NSE Nifty inched up 3.55 points or 0.03 per cent to 11,934.50.

HCL Tech was the top gainer in the Sensex pack, climbing 3.94 per cent, followed by Kotak Bank, Infosys, Reliance Industries, UltraTech Cement and Tech Mahindra.

On the other hand, Titan, Sun Pharma, ICICI Bank, Bajaj Finance, SBI and Maruti were among the main laggards, shedding up to 2.18 per cent.

According to analysts, the recent recovery in the market was led by expectations of fresh fiscal stimulus from the government, but the sops announced have failed to cheer investor sentiment.

IT stocks continued to gain momentum ahead of crucial Q2 results and better earnings visibility, they added.

"Market may consolidate due to below than anticipated stimulus package and the large part of the positive Q2 results announced till date is well factored in the prices.

BSE energy, IT, teck, power, metal and basic materials indices rose as much as 1.54 per cent, while healthcare, consumer durables, finance and bankex ended in the red.

Broader BSE midcap and smallcap indices slipped up to 0.29 per cent. Global equities stumbled following reports that Johnson & Johnson was pausing its COVID-19 vaccine trials because of an unexplained illness in a study participant.

Bourses in Shanghai and Tokyo ended on a positive note, while Seoul was in the red. Hong Kong was closed for a holiday.

Stock markets in Europe were trading in the negative territory in early deals. International oil benchmark Brent crude was trading 1.73 per cent higher at USD 42.44 per barrel.