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Sensex, Nifty tumble 2% as rising COVID-19 cases spook investors

IndusInd Bank, followed by Bharti Airtel, Tata Steel, ICICI Bank, M&M, Maruti, Axis Bank and ONGC were the top losers on Sensex. On the other hand, Kotak Bank, Infosys and TCS were the gainers

Rupa Burman Roy | September 21, 2020 | Updated 18:05 IST
Sensex, Nifty tumble 2% as rising COVID-19 cases spook investors
Contrary to the equity market, the rupee strengthened 7 paise and closed at 73.38 against the US dollar

Triggered by a massive global sell-off, Sensex and Nifty closed over 2% each, amid heavy selling in index heavyweights.

Global equity markets fell sharply today, as worries about a resurgence in coronavirus cases across the globe spooked investors, especially after many European cities started lockdown restrictions. Extending fall for the third straight session, Sensex ended 811 points lower at 38,034 and Nifty fell 282 points lower at 11,222.

IndusInd Bank, followed by Bharti Airtel, Tata Steel, ICICI Bank, M&M, Maruti, Axis Bank and ONGC were the top losers on Sensex. On the other hand, Kotak Bank, Infosys and TCS were the gainers.

Contrary to the equity market, the rupee strengthened 7 paise and closed at 73.38 against the US dollar.

On the sectoral front, all the indices closed majorly in red territory. While metal and realty index closed 5.5% lower each, 4% drop was seen in media, pharma, PSU Banks and auto scrips.

Market indices fell over 2% today, followed by a major drop in European stocks to two-weeks lows, amid concerns over rising COVID-19 cases in the continent.

Vinod Nair, Head of Research at Geojit Financial Services said, "Indian benchmark indices succumbed to profit booking in the second half of the trading day and ended more than 2% down. It was in sync with global cues which turned negative following a surge in infections in various countries including in Europe. Additional restrictions were being considered in Europe following an increase in infections. With high valuations and worries that earnings may not justify such valuations anytime soon, markets may trade uncertain for the time being. Stay cautious."

European markets traded deep in red as investors watched the rise in coronavirus cases across Eurozone. This prompted renewed lockdown measures in some countries, casting doubt over the economic recovery.

Keshav Lahoti, Associate Equity Analyst, Angel Broking said,"Sensex and Nifty started the week on a weak note by correcting by 811 points (2.09%) and 254 points (2.21%) respectively due to news of some European countries are planning to reimpose lockdown due to a spike in covid cases. A correction was even higher in Nifty Midcap 100 (down by 3.90%) and Nifty Smallcap 100 (down by 3.65%). India VIX increased by double-digit i.e.10.62%.

Markets had turned lacklustre last week, amid rising COVID-19 cases on a global as investors turned pessimistic over the news of re-imposition of lockdowns, hampering business activity. Last week, Sensex ended 8.75 points or 0.02% lower, while Nifty gained a mere 40 points or 0.35%.

Uncertainty about a fresh round of fiscal stimulus from Washington and concerns over tensions between world two largest economies have also kept the markets volatile recently.

In the US, stock indexes closed lower Friday, amid uncertainty about a fresh round of fiscal stimulus from Washington, concerns about tensions between the US and China, and worries about the sluggish pace of economic recovery.

Worldwide, there were 312 lakh confirmed cases and 9.65 lakh deaths from COVID-19 outbreak. Meanwhile, India's death toll from COVID-19 infections rose to 0.87 lakh and total coronavirus cases to 54.87 lakh as of Monday.

On Nifty trend call, -Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said," The markets have broken the support of 11300 on a closing basis and this is definitely an alarming situation. We could drop to 10950-11000 levels as the fall today has been fierce and on the back of good volumes. The resistance on the upside is at 11550-11600. Until then the markets look weak."

Ruchit Jain (Senior Analyst - Technical and Derivatives, Angel Broking said," On the daily chart, we can observe a formation of a Head and Shoulders pattern and Nifty has closed right at the neckline of the pattern. Thus, a continuation of the down move could lead to further sell-off and hence, we continue with our recent advise for traders to stay light on positions and avoid overnight positions

He added, "As far as levels are concerned, 11185 and 11110 are the intraday supports; followed by the short term support at the 89 DEMA which is around 11940. On the flipside, 11335 and 11450 are now the immediate resistances."

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