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Sensex tanks 1,100 pts on global concerns
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SME Times News Bureau | 24 Sep, 2020
Dangers to an overall international economic recovery such as rising
Covid-19 cases, along with possible reimposition of lockdown measures in
some European countries, pushed the global and the Indian stock markets
deep into the red on Thursday, with the BSE Sensex losing 1,100 points,
its worst performance in six months.
Besides, no new stimulus
measures for the US, combined with a slower growth forecast for the
world's largest economy, also impacted global sentiments.
Not just equities, but crude oil and precious metal prices fell, leading to a chaos across asset classes.
However, the US dollar made the most of the bloodbath.
The domino effect of such massive downside resulted in the Indian stock markets witnessing a gap-down opening on Thursday.
The BSE Sensex lost 1,100 points and the NSE Nifty50 fell well below the psychological 11,000 mark.
Post
Thursday's selloff, Sensex lost 2,292 points in the last four sessions.
This was the sixth consecutive session of loss for the Indian indices,
as well as the biggest single day fall for the BSE Sensex in four months
and the biggest losing streak (6 sessions) in seven months.
The Nifty50 on the National Stock Exchange (NSE) fell well below the psychological 11,000 mark.
The
recent bear run has been due to resurgence in coronavirus cases across
the world, largely in Europe, and anticipation of fresh lockdown
restrictions across several countries of the continent, including the UK
and France.
The BSE Sensex closed at 36,553.60, lower by 1,114.82 points, or 2.96 per cent, from the previous close of 37,668.42.
It opened at 37,282.18 and touched an intra-day high of 37,304.26 or a low of 36,495.98 points.
The Nifty50 closed at 10,805.55, lower by 326.30 points or 2.93 per cent from its previous close.
Manish
Hathiramani, technical analyst, Deen Dayal Investments, said: "The
support level of 10,900-10,950 has been disrespected during today's
trading session. We have also pierced 10,882 which was made on August 3,
2020. This opens a new target of 10,750. Any bounce can be utilised to
short the Nifty for this target."
Among the sectors, auto, banking, metal and IT indices lost the most.
"European
stocks and Asian stocks dropped following a rout in tech shares in the
US on Wednesday and as investors have largely given up on the idea that
the US Congress will provide a new stimulus, while worrying about a
recent rise in Covid-19 cases," said Deepak Jasani, Head of Retail
Research at HDFC Securities.
"Economists at Goldman Sachs cut
their US growth forecast for the fourth quarter in half, to 3 from 6 per
cent. Investors are bombarded by a perfect storm of problems including
rising virus infections, new lockdowns, a slowing economic recovery,
stalled US stimulus talks and election uncertainty. Investors also
fretted that a second wave of coronavirus cases during the northern
hemisphere's coming winter will derail the economic recovery."
According
to Vinod Nair, Head of Research at Geojit Financial Services: "Indian
benchmark indices had a gap down opening and kept losing ground as the
day wore on, to finally end the day around 2.8 per cent down. Markets
tracked weak global cues as the uncertainty witnessed in the last few
days gave way to negativity, with broader markets also underperforming."
"The
uncertainty regarding an economic recovery, the unabated rise in virus
infections, and today being derivatives expiry day, all contributed to
the negativity. With volatility expected to be high, traders are advised
to remain cautious."
In addition, Aamar Deo Singh, Head
Advisory, Angel Broking said: "Markets witnessed a steep fall with the
benchmark indices down by almost 3 per cent, with sell-off across global
markets as the US Federal Reserve statements on pace of economic
recovery, appears to have impacted investor sentiment."
"So,
after the spectacular rally since March, we are witnessing
profit-booking. Further it was the monthly F&O Expiry, which also
added to the enhanced volatility."
Analysts said that the bear run is likely to continue in the near run with no respite seen from the risiing Covid cases.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
|
87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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