Sensex, Nifty Close At Over 2-Month Lows Amid Broad-Based Selloff
A selloff across sectors - led by financial, auto and metal stocks - pulled the markets lower
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The Sensex ended 1,114.82 points (2.96 per cent) lower at 36,553.60 and the Nifty settled at 10,805.55, down 326.30 points (2.93 per cent) from its previous close - their lowest levels since July 16.
IndusInd Bank, Tata Motors, Bajaj Finance, Grasim and Tata Consultancy Services, closing between 5.45 per cent and 7.45 per cent lower, were the worst hit among the 47 laggards in the 50-scrip Nifty index.
TCS, Reliance Industries and Infosys were the biggest drags on Sensex. Analysts say concerns about a delayed recovery from the damage caused by the coronavirus pandemic, amid fears about a second wave of infections, shook investors.
"The correction in the market, led by the mother market United States, is a normal, healthy and desirable correction, which will make markets look more realistic and rational," VK Vijayakumar, chief investment strategist at Geojit Financial Services, told.
Volatility intensified as investors rushed to settle their positions ahead of the expiration of monthly derivatives (futures and options) contracts, due by the end of the session, say analysts.
The Sensex shed 2,559.87 points, marking a decline of 6.54 per cent, in the September series. The Nifty lost 753.7 points (6.52 per cent) during this period.
TCS shares fell as much as 5.48 per cent to Rs 2,332 apiece on the BSE, extending losses to a second straight day, after Shapoorji Pallonji group - the largest minority shareholder in Tata Group - said on Tuesday it wanted to separate interests from the autos-to-steel conglomerate.
"The markets recovered after the crash in end-March and ran up too much too fast exposing the economy-market disconnect. The rally was triggered and sustained by the huge liquidity and the historically low interest rates. It is difficult for rallies to sustain without earnings support. For he Nifty, 10,800 is the next support," Mr Vijayakumar added.
Federal Reserve Vice Chair Richard Clarida said on Wednesday that the US economy remains in a "deep hole" of joblessness and weak demand, and called for more fiscal stimulus, noting that policymakers "are not even going to begin thinking" about raising interest rates until inflation hits 2 per cent.
European share markets started Thursday's session on a negative note, with the United Kingdom's FTSE 100 benchmark index down 1.06 per cent in early trade. France's CAC 40 and Germany's DAX 30 indices were down 1.10 per cent and 0.92 per cent respectively