After opening in green, equity benchmark indices Sensex and Nifty dropped on Tuesday, ending the day 1.1% lower.

Benchmark Indian equity indices plunged sharply on Tuesday.

At the closing bell, the BSE Sensex stood lower by 872 points (down 1.1%).

Meanwhile, the NSE Nifty closed lower by 262 points (down 1.1%).

Eternal, Bajaj Auto, and Maruti Suzuki, on the other hand, were among the top losers today.

The GIFT Nifty ended at 24,78,2 down by 209 points.

The BSE Mid Cap ended 1.7% lower, and the BSE Small Cap index ended 1% lower.

Sectoral indices are trading on a negative note with stocks in the auto sector, realty sector, and power sector witnessing selling pressure.

The rupee is trading at 85.6 against the US$.

Gold prices for the latest contract on MCX are trading 0.3% lower at Rs 9,3616 per 10 grams.

Meanwhile, silver prices are trading 0.4% lower at Rs 95,805 per 1 kg.

Here are four reasons why Indian markets are falling today:

#1 Rising Covid 19 Cases

India has seen a sudden increase in coronavirus (Covid-19) cases over the past few days. Though the cases are not yet at alarming levels, the fast pace of rising Covid-19 cases has shocked investors.

India recorded 257 active infections reported nationwide as on May 19, as per the Ministry of Health and Family Welfare (MoHFW).

#2 China's Loan Prime Rate Cut

The People's Bank of China cut the 1-year loan prime rate to 3 per cent from 3.1 per cent, and the 5-year loan prime rate to 3.5 per cent from 3.6 per cent to aid the economy. This comes at a time when trade tensions with the US threaten to derail the already sluggish Chinese growth.

Strength in the Chinese economy could derail India's 'China+1' play.

#3 US Futures Fall

Futures tied to the US markets were edging lower today, suggesting a likely weak trade on Wall Street later today. The Dow Jones futures were down 0.14%, S&P500 futures 0.28 per cent, and the Nasdaq futures 0.4%.

Stock markets in the US witnessed a choppy on Monday as well, with US Treasury yields firming up lately, after Moody's downgraded the US government's credit rating last Friday.

#4 Elevated Valuations

Experts highlight the elevated valuations of the domestic market, which will cap the rise of the market.

The current Nifty PE at 22.3 is at a six-month high and is slightly above its two-year average PE of 22.2.
 

Borana Weaves IPO subscribed 6x

In news, Borana Weaves IPO saw strong subscription on May 20 by getting booked nearly 6 times on its first day of bidding so far. Retail investors led the subscription rally by booking their reserved portion 20.59 times.

Here's the updated version with "lakh" converted to "million":

The IPO received bids for 22 million (m) shares, as against its offer size of 3.689 m shares, according to data available on the NSE at 3 pm. While retail investors took the lead, non-institutional investors (NIIs) followed by booking their reserved portion 8.06 times.

The portion reserved for Qualified Institutional Buyers (QIBs), however, saw a muted response, being subscribed only 3% so far.

Borana Weaves is raising Rs 1,448.9 m via an initial public offering of 6.708 m shares at the upper price band. The IPO solely comprises a fresh issue of shares and will remain open for public bidding till May 22.

The textile company has set a price band of Rs 205-216 per share for the IPO.

Investors can bid for 69 shares with a minimum investment of Rs 14,904, and in multiples thereafter. The shares of the company are likely to be listed on stock exchanges on May 27.
 

Protean's Share Falls Another 13%

Moving on, after crashing 20% in Monday's trading session, shares of Protean eGov Technologies fell another 13% on Tuesday morning.

The stock, which is owned by ace investor Ramesh Damani, is in a freefall after the company was not selected by the Income Tax Department for the project of Technology revamp, which includes Design, Development, Implementation, Operations and Maintenance of PAN systems.

In the last 2 days, Protean shares have lost over 30% of its value and if the sharp downside continues, the stock may even hit its 52-week low at Rs 930. The stock was trading around Rs 995 in the opening session.

In a regulatory filing on Sunday, the company said it was informed by the Income Tax Department (ITD) that they have not been considered favourably for the next round of RFP selection process.

It said the project was for a technology revamp which include Design, Development, Implementation, Operations, and Maintenance of PAN systems at the Income Tax department.

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