September 26, 2020 1:33:27 am
Benchmark indices on Friday almost recouped the losses in Thursday’s trade despite negative global cues and uncertainties surrounding the Covid pandemic and the economic recovery. The Sensex, which plummeted 1,114 points on Thursday, gained 835 points to 37,388.66 and the NSE Nifty Index rose 241 points at 11,050.25.
Vinod Nair, Head of Research, Geojit Financial Services, said, “This relief rally was in spite of mostly negative global cues and seemed to be based on the hope of more stimulus measures by the government. On a weekly basis, the recovery today enabled the benchmark indices to limit to around 3.8 per cent loss for the week. FPIs have net sold close to Rs 2,000 crore so far this month … which indicates the uncertain trend in the markets after a huge inflows in August.”
“The factors which prevailed against the markets like the sell-off in the tech sector, the emergence of the second wave of the pandemic and probability of geopolitical tensions centering around Chinese stand-off etc may continue to influence the course of the markets in the coming weeks,” said Joseph Thomas, Head of Research, Emkay Wealth Management. However, expectations of another fiscal package from the government ahead of the festival season is a factor that may endow the markets with some strength, he said.
According to Deepak Jasani, head—retail research, HDFC Securities, the investor sentiment was dented as rising coronavirus cases led to the possibility of fresh lockdowns in some European countries, which could further slow down the pace of global economic recovery. Firmness in the US dollar also put pressure on domestic shares.
The broader markets underperformed the benchmark indices with BSE Midcap and Smallcap indices declining by 4.7 per cent and 5.3 per cent respectively during the week.
Among the sectoral indices, telecom index fell over 10 per cent, followed by media (down by 9.3 per cent).
Metal and PSU bank index were down 8 per cent.
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