Stock market benchmark Sensex tanked 1069 points on Monday to close at its lowest level in nearly six weeks as investors feared the Modi government’s stimulus package would not reduce the stress on the economy.

Banks and financial services stocks led the crash on apprehensions that bad loans would rise in the system.

Experts feel the markets are likely to be volatile and that investor focus will be on the coronavirus and its containment and expectations of more steps from the Reserve Bank of India (RBI).

On Sunday, finance minister Nirmala Sitharaman concluded announcements relating to the Rs 20 lakh crore relief package. However, the measures were a big let down as North Block did not address the immediate problem of a fall in demand. The measures it announced would be effective only over the medium- to long-term.

“Sentiments in the domestic markets were dampened on account of the disappointing economic package of the government, and the extension of the nationwide lockdown for the fourth time to May 31

“Investors feel the package may fail to revive the economy in the near-term as there was a lack of enough measures to boost immediate demand and consumption. Banks and financial services were the most hit as there is a fear of rising NPAs,’’ Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services, said.

He added that for now the market will focus on the global cues and the quarterly results as the major event of the stimulus announcement is now behind and that there is a fear of a second wave of the pandemic spread.

Though the 30-share index opened in the green at 31248.26, it breached the 30000-mark during intra-day trades to touch 29968.45. Thereafter, the gauge closed 1068.75 points, or 3.44 per cent, lower at 30028.98.

Similarly, the broader NSE Nifty plunged 313.60 points, or 3.43 per cent, to 8823.25.

IndusInd Bank was the top laggard in the Sensex pack, cracking around 10 per cent, followed by UltraTech Cement, HDFC, Axis Bank and ICICI Bank. On the other hand, TCS, Infosys, ITC and HCL Tech closed with gains.

“Stimulus 2.0 did not offer much to the corporate sector, at least directly. Despite the stated Rs 20 lakh crore package, near-and longer-term fiscal commitments are pegged at Rs 1.7 lakh crore and Rs 1.5 lakh crore, respectively, with another up to Rs 0.5 lakh crore in contingent outgo.

“The policies laudably focused on sustenance of the poorest but did little to boost demand. Meanwhile, financials would bear a large part of the burden,’’ Sujan Hajra, chief economist at Anand Rathi, said.

International oil benchmark Brent crude futures surged 4.55 per cent to $33.98 per barrel.

The rupee plummeted 33 paise to close at 75.91 against the dollar on Monday, tracking weak domestic equities and foreign fund outflows.

Forex traders said rising crude oil prices and concerns about the effectiveness of the fiscal stimulus package weighed on investor sentiment.

Reliance rights

Reliance Industries shareholders will have to pay only 25 per cent for subscribing to the company's mega Rs 53,125-crore rights issue, and the balance will have to be paid in two installments in May and November next year, the company said.

The oil-to-telecom conglomerate's rights issue will open for subscription for shareholders on May 20 and will close on June 3. One share will be offered for every 15 shares held at Rs 1,257.