NEW DELHI: Stock indices ended lower for a sixth straight session on Thursday with the benchmark BSE sensex falling more than 1,100 points dragged down by metals, IT and banking stocks as fears of further pandemic restrictions kept nervous domestic investors amid strong global share sales.
The 30-share BSE index finished 1,115 points or 2.96 percent lower at 36,554; while the broader NSE Nifty stood at 326 points or 2.93 percent at 10,806.
IndusInd Bank, Bajaj Finance, M&M, Tech Mahindra, TCS and Tata Steel were the main losers in the sensex package, falling as much as 7.1%. With the exception of Hindustan Unilever, all stocks ended in the red.
On the NSE, all sub-indices ended with losses trailed by Nifty IT, Metal, Auto and PSU Banks which fell as much as 4.24%.
These are the main reasons behind the slide:
* Weak global signals
Equity markets in emerging Asian economies plunged on Thursday as concerns about rising coronavirus cases in the developed world hit investors’ risk appetite, driving capital to the dollar and other havens. traditional insurance.
Tone set by a drop on Wall Street overnight, Singapore’s Strait Times Index was also caught up in the action, shedding nearly 1% as early declines in China saw losses of up to 2.5% in the whole region.
* Increase in Covid-19 cases
The resurgence of Covid cases in countries such as the United Kingdom, Canada, Spain, France, Canada and the Netherlands has increased fears of further closures, leaving investors nervous.
India’s number of Covid-19 cases rose to 57,32,518 with 86,508 people testing positive in one day, while the death toll rose to 91,149 with 1,129 people succumbing to the disease in a 24-hour span, according to the Interior Ministry data updated at 8 am on Thursday. .
“Expectations for internal growth and recovery have been lowered due to fears that restrictions will return and virus cases will increase,” Vinod Nair, head of research at Geojit Financial Services Ltd told Reuters news agency.
France became the latest European country to act, closing bars and restaurants in Marseille’s second-largest city and putting it on “high alert,” while several others, including Paris, will see new restrictions, including limitations on public meetings and hours. earliest closing times.
The British government has also shortened opening hours and warned of other measures, while the Madrid region has locked up some 850,000 people and plans to widen its curbs.
* Economic uncertainty
The coronavirus crisis lasts longer than expected and some countries will take years to return to growth, said the No. 2 official of the International Monetary Fund (IMF).
The US Federal Reserve authorities promised to keep interest rates close to zero, while business activity cooled in September, with gains in factories offset by a decline in service industries.
American traders are now increasingly concerned that rising infections in the country could see similar moves, and several Federal Reserve officials, including Chief Jerome Powell, have called for new stimulus to mitigate the impact.
On Wednesday, US Federal Reserve Vice Chairman Richard Clarida said the US economy remains in a “deep hole” of unemployment and weak demand, calling for more fiscal stimulus, noting that policy makers are “not even going to start thinking” about raising interest. rates until inflation reaches 2%.
Eurozone business growth also came to a halt this month, as new restrictions to quell a resurgence of infections pushed the service industry back.
In addition, some members of the Bank of Japan board have warned that a resurgence of the pandemic could delay an economic recovery and destabilize its banking system by causing more companies to go under, minutes from the bank’s July rate review showed.
* Expiration of F&O
Markets are also experiencing volatility before derivatives expire and traders are looking to place their positions from the September series to the October 2020 series. With futures and options expiring, investors often try to exit their positions.
(With contributions from the agency)
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