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Tuesday, November 24, 2020

Sensex cracks 600 points: Covid cases, growth fears, US polls weigh

The rupee depreciated by 16 paise to settle at more than one-month low of 73.87 against the US currency.

By: ENS Economic Bureau | Mumbai | Updated: October 29, 2020 12:42:00 am
Pedestrians wearing protective masks walk past the Bombay Stock Exchange (BSE) in Mumbai, India, on Friday, March 27, 2020. (Photographer: Dhiraj Singh/Bloomberg)

Domestic stock markets on Wednesday came under intense selling pressure as resurgence of Covid cases in Europe and the US, lockdowns and worries over another economic slowdown hit sentiment across major bourses. With US election uncertainties adding to the worries, the BSE Sensex fell 599.64 points to 39,922.46 and the Nifty Index declined 159.80 points to 11,729.60.

The rupee depreciated by 16 paise to settle at more than one-month low of 73.87 against the US currency.

Analysts said shares across the world plunged on Wednesday as coronavirus infections grew rapidly in Europe and the US, igniting fears of possible strict lockdown measures that could damage already fragile economic recoveries. The uncertainty surrounding the upcoming US election also has market players hesitant to make big moves.

“European markets touched 4-6 month lows. Uncertainty around US Presidential elections has succeeded in triggering a correction in global markets which was already reeling under Covid-19 cases. The Nifty level of 11,661 remains a crucial support on the downside,” said Deepak Jasani, head of retail Research, HDFC Securities.

Indian markets are now falling in tandem with the weak global trend as the world’s economic recovery will slow down this quarter with implications on world equities, said an analyst. The market is also keenly watching the developments in the Bihar Assembly election on the domestic front.

IndusInd Bank was the top laggard in the Sensex pack, skidding 3.45 per cent, followed by HDFC, ICICI Bank, Tech Mahindra, Bajaj Finance, UltraTech Cement and HDFC Bank.

Meanwhile, the domestic currency settled at more than one-month low due to month-end dollar demand from importers and the greenback’s gains against major currencies. Losses in domestic stock markets and uncertainty ahead of expected fresh stimulus measures also weighed on the investor sentiment.

At the interbank forex market, the rupee opened on a positive note at 73.70 against the greenback, but soon pared gains to touch an intra-day low of 73.93.

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