Domestic equity indices Sensex and Nifty closed lower on Thursday on grim outlook by Federal Reserve for the US economy. Reversing yesterday's gains, Sensex ended 708 points lower at 33,538 and Nifty fell 214 points to 9,902. Markets also fell after Supreme Court asked telcos to submit replies on a plan for payment of AGR dues. Bank Nifty lost 575 points or 2.72% to 20,525 as many banks have large exposure to telecom sector.
While Bharti Airtel fell 2.7%, Vodafone Idea lost 14.75% in today's session.
All sectors closed in red territory today, with telecom, banks and finance registering maximum losses.
Equity market indices fell sharply by Thursday's afternoon session tracking bearish cues from European markets that opened in red on US Federal Reserve's projections that the world's biggest economy would shrink 6.5% this year.
Traders said gloomy economic projections from the Fed sent the US dollar and most Wall Street shares lower, boosting demand for the yellow metal. Fed officials after its meet on Wednesday also flagged the need to keep the key interest rate near zero through at least 2022.
The Federal Reserve after its two-day meet estimated the US economy to shrink by 6.5% in 2020 and the unemployment rate to be at 9.3% at year's end.
Ajit Mishra, VP - Research, Religare Broking said, "Markets witnessed a sharp decline and shed over two percent, tracking unsupportive global cues. The statement from the US Fed that recovery from pandemic would take longer than expected triggered weak start which worsened with a deep cut in the European indices in the latter half."
"With infections continuing to remain high, the markets are also worried about any additional lockdown measures being imposed. This could mean offsetting the optimism of the last 2 weeks, where investors were banking on the economy restarting fully," Vinod Nair, Head of Research at Geojit Financial Services.
Asian equities closed lower, tracking bearish trend from Wall Street after Federal Reserve left rates unchanged and hinted at keeping rates near zero through 2022.
Meanwhile, companies set to announce their earnings are Shriram City Union Finance, Westlife, JK Agri Genetics, KSB, KNR Constructions, Sundaram Fasteners, Redington, Ind Bank Housing.
As per technical indicators, Nifty ended below strong support zone of 10k mark and made a formed bearish candle on by the closing bell. Further, it pledged its full support to ease the pandemic pain.
Commenting on Nifty's near term technical outlook, Rohit Singre, Senior Technical Analyst at LKP Securities said, "Index closed below strong support zone of 10k mark now if continue to trade below 10 mark then we may see some cuts towards immediate support zone of 9800-9700 zone on the other hand strong hurdle is formed at 10000-10100 zone."