Why did the Sensex fall by nearly 900 points despite the government announcing a stimulus package of nearly Rs.20 lakh crore on 13 May?

Despite the solid stimulus package, Indian markets corrected sharply on Thursday largely on the back of weak global cues. The Sensex tanked as much as 956 points or 3% during the day while Nifty slipped 2.8 per cent. Sensex closed at 31,123, down 886 points; while the Nifty ended at 9,143, down 241 points. The saving grace was FMCG and pharma with all the other indices taking deep cuts. The IT index came in especially for bad treatment after the US Fed Chief warned on Wednesday that the recession could be the worst since the Second World War. There was also disappointment that the FM announcements were more of leveraging on existing institutions and postponement of tax rather than genuine infusion of cash. Markets were also worried that the Rs.90,000 crore support for DISCOMS could hit the balance sheets of PFC and REC badly. But it was the weak global sentiments that really rubbed off on the market sentiments.