Sensex falls 561 points on weak global cues as Covid-19 worries mount

The benchmark indices dropped 1.6 per cent on Wednesday amid a sell-off in the European markets and a drop in the US stock futures because of worries over a fresh wave of Covid-19. The Sensex fell 561 points, or 1.6 per cent, to end at 34,869. The index dropped as much as 911 points from the day’s high. The Nifty fell 166 points, or 1.6 per cent, to end at 10,305. The index hit an intra-day high of 10,553 — a level last seen in early March.

While the markets traded with gains for the most part of the day, the decline in the European markets triggered profit-taking ahead of derivatives expiry on Thursday. In the past one week, the benchmark indices rallied as much as 7 per cent.

The risk-on trade — underpinned by supportive central bank action — took a beating after several nations and the US states reported record daily infections. Experts said investors are fearing that the government would re-introduce curbs, which could hamper business activity.

“In spite of opening on a positive note, markets finally ended negative, in sync with negative global cues. The rising cases of virus infections worldwide, especially in the Americas, unnerved the global markets. Domestic cases too show no signs of abating and this must be weighing in on the investors,” said Vinod Nair, head of research, Geojit Financial Services.

During Indian market hours, most European markets traded more than 1.5 per cent lower, while the futures market pointed to a lower opening on the Wall Street.
 

Barring six, all the 30 Sensex components ended with losses. Banking and financial stocks were the biggest drag on the markets. IndusInd Bank and ICICI Bank fell the most at 7.4 per cent each.

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Aamar Deo Singh, head advisory, Angel Broking said the move to bring co-operative banks under the supervision of the Reserve Bank of India dampened investor sentiment towards banking shares.

The Bank Nifty index fell nearly 4 per cent to end at 21,426.8. In the past one week, the index has posted more than 10 per cent gain.

Experts said technical factors intensified the selling pressure.

“Nifty arrested at the expected resistance level of 10,550 and reversed back sharply due to two reasons. First due to steep fall in world markets and secondly because of technical sell-off. Nifty has fallen below the level of 10,300 and Bank Nifty to 21,350. In the short term, Nifty may find support at 10,250 or 10,200. On the higher side 10,450 or 10,500 would be major hurdle,” said Shrikant Chouhan, executive vice president, equity technical research, Kotak Securities.

Overall, the market breadth was mixed with 46 per cent of the stocks traded on the BSE ending with gains.