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Tuesday, November 24, 2020

Covid cases, fading US stimulus hopes pull down Sensex; Dow plunges 870 pts

US stocks fell sharply as surging Covid cases and a stalemate in Washington over the next fiscal aid bill darkened the economic outlook in the run-up to the Presidential election. Dow Jones Index fell 3.07 per cent, or 869.76 points, during mid-session.

By: ENS Economic Bureau | Mumbai | October 27, 2020 3:08:03 am
The rupee depreciated by 23 paise to settle at an around four-week low of 73.85 against the US dollar on Monday as muted domestic equities and a strong US dollar weighed on investor sentiment. Crude oil prices fell over 2 per cent on demand concerns.

Stock markets on Monday fell by 1.3 per cent as weak global cues, especially concerns over the elusive stimulus deal in the US, and rising Covid cases and fresh lockdowns in Europe hit sentiment. The Sensex plunged by 540 points to 40,145.50 and the Nifty Index shed 163 points to 11,767.75 in the selling wave, even as many countries, including Italy and Spain, announced lockdowns again to tackle the Covid virus.

US stocks fell sharply as surging Covid cases and a stalemate in Washington over the next fiscal aid bill darkened the economic outlook in the run-up to the Presidential election. Dow Jones Index fell 3.07 per cent, or 869.76 points, during mid-session. Nasdaq was down 2.47 per cent.

The rupee depreciated by 23 paise to settle at an around four-week low of 73.85 against the US dollar on Monday as muted domestic equities and a strong US dollar weighed on investor sentiment. Crude oil prices fell over 2 per cent on demand concerns.

The sell-off in the equity markets was led by Reliance Industries, which plunged 3.97 per cent to Rs 2,028.70, after the Singapore Arbitration Centre passed an interim order on a plea filed by Amazon. The court has asked the Future Group to put its plan of selling its retail business to RIL on hold.

Explained

US polls key

Indices are expected to remain weak in the near term and will be driven by the trend of ongoing Q2 results and developments in the US. All sectoral indices ended in the negative.

The BSE Bankex declined 1.34 per cent. All sectoral indices ended in the negative with metals, auto, realty and pharma indices falling the most.

According to Ajit Mishra, VP-research, Religare Broking, reports of rising Covid cases across Europe and the US are haunting markets across the globe including the domestic markets. “Besides, market participants are hoping for some clarity over the US stimulus package before the US election. Amid all this, domestic earnings announcements are further adding to the volatility,” he said.

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