Domestic stock markets on Monday joined a global sell-off, triggered by fears of the impact of the Covid-19 resurgence on the world economy and investigative reports in the international media, including The Indian Express, on banks red-flagging transactions to the US FinCEN for suspected money laundering or financial fraud.
The Sensex plummeted 812 points, or 2.09 per cent, to 38,034.14 and the Nifty50 fell 254.40 points, or 2.21 per cent, to 11,250.55.
The overheated markets were just waiting for some reason to correct and the sharp fall in the global markets was a good reason for domestic markets to correct, said veteran BSE dealer Pawan Dharnidharka.
Analysts said Asian shares, including India, slipped on fears that the global economy is likely to come under pressure again due to a resurgence of coronavirus infections in Europe, while fading hopes for US fiscal stimulus hopes also weighed. Hong Kong-listed shares of Standard Chartered and HSBC tumbled on Monday following reports that they allegedly moved large sums of suspicious funds.
European stocks fell the most since July after the report on bank allegations, and signs that London is heading for a second lockdown. Airlines and travel companies led losses in the Europe Stoxx 600 Index. HSBC Holdings Plc fell to the lowest since 1995 and European bank shares dropped following the report on lapses in suspicious activity reports by large banks including JPMorgan, Standard Chartered, Barclays, Deutsche Bank and BNY Mellon, said Deepak Jasani, head of retail Research, HDFC Securities.
Fading hopes of US fiscal stimulus
Shares slipped on fears that the global economy is likely to come under pressure again due to a resurgence in coronavirus infections in Europe, while fading hopes for US fiscal stimulus weighed.
Jindal Steel & Power, which was mentioned in the report, plunged 11.67 per cent to Rs 175.30 on the BSE on Monday.
Ajit Mishra, VP-research, Religare Broking, said, “Markets started the week on a feeble note and lost nearly 2.5 per cent following weak global peers. While the first half was lacklustre, significant selling pressure was witnessed in the latter half.” The broader markets too followed suit as both the mid-cap and small-cap indices ended lower. The rupee gained 7 paise to 73.38 against dollar despite the market fall.
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