Why did the Sensex correct so sharply on 14 May by 886 points even though the government announced the rescue package?

The correction in the Nifty resulted in market cap depletion of Rs.199,000 crore in a day. COVID-19 cases are still rising and market participants were disappointed by the stimulus package. However, the one big factor that spooked the markets was the Fed Chair warning that the US recession could be much sharper. Technology stocks were the worst hit. Apart from the US recession warning, there was also a Gartner report which warned of a 10% cut in tech spending during the year 2020. That hurt the Indian IT companies as most of them are project based and rely on global IT spending. Some sectors that held out were healthcare and FMCG, but heavyweights like IT, banks and energy were in the negative.