Sensex tanks 770 points on poor growth numbers

WION Web Team
New Delhi Published: Sep 03, 2019, 04:06 PM(IST)

File photo. Photograph:( Reuters )

Story highlights

The Indian economy, the third-largest in Asia, expanded just 5% year-on-year in the three months ended June - the slowest pace since March 2013, official data showed on Friday, far below the 5.7% forecast in a Reuters poll.

The broader NSE Nifty fell as much as 2.04 per cent to 10,798 on Tuesday, while the benchmark BSE Sensex also dropped 770 points to 36,563.  Markets were closed on Monday for a public holiday.

The Indian economy, the third-largest in Asia, expanded just 5% year-on-year in the three months ended June - the slowest pace since March 2013, official data showed on Friday, far below the 5.7% forecast in a Reuters poll.

"This data has shown that growth is much slower than we expected," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities, adding that the slowing private consumption was a major worry.

Adding to the worries, a private sector survey showed that the country's manufacturing sector grew at its slowest pace in 15 months in August.

Some analysts also said that the government's measures over the past week to encourage investment may not be enough to lift the economy out of the downtrend.

"While the market is expecting the government to boost spending to revive demand, the economy is not giving much legroom to do that," Khemka said.

The Indian rupee weakened sharply to a mid-December low of 72.37 against the dollar, versus its close of 71.41 on Friday.

Finance stocks were hammered the most, with the Nifty PSU Bank index, which tracks the country's state-owned lenders, tumbling as much as 4.1%.

The government announced a series of mergers involving 10 public sector banks to boost the struggling sector and revive economic growth.

Shares in Punjab National Bank, the biggest lender among the 10 banks, slumped 8.6% to their lowest since Oct. 1.

IT stocks were among the gainers on the NSE index, bolstered by the weak rupee. Tech Mahindra Ltd climbed 3.4% to a near 10-week high. 

(With inputs from Reuters) 

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