Why did the Sensex correct by 1000 points on 18 May? Which sectors led the stock markets lower?

The financials fell sharply on Monday after the fourth tranche of the stimulus announcement. Shares of financial service providers including banks, NBFCs and HFCs tumbled up to 12% on the BSE. Post stimulus, there were concerns that asset quality could come under pressure due to the extended nation-wide lockdown and challenging economic environment. In addition, the decision of the government to exclude all debt associated with the pandemic from defaults from IBC and the 1-year suspension of bankruptcy proceedings were seen as credit negative. Apart from banks, NBFCs like M&M Finance also took deep cuts on the back of bad results taking other NBFCs like CIFCO, STFL along with it.