Sensex snaps 10-day rally, slumps 2.6%

Index slides 1,066 points amid global sell-off on fading U.S. stimulus hopes, fresh lockdowns in Europe.

Snapping its 10-session winning run, the benchmark S&P BSE Sensex plunged 1,066.33 points on Thursday as investors pressed the exit button amid a massive sell-off in global markets.

The 30-share index slumped 2.61% to close at 39,728.41. 

The broader NSE Nifty crashed 290.70 points, or 2.43%, to 11,680.35.

Recovery at risk

 Global equities cratered as hopes of a pre-election stimulus deal in the U.S. faded, while multiple countries in Europe braced for a second round of lockdowns to curb rising COVID-19 cases, jeopardising the already shaky economic recovery.

Back home, market participants were also eager to book profits after the recent rally amid already stretched valuations, traders said. 

Barring Asian Paints, which inched up 0.32% , all Sensex constituents closed in the red.

Bajaj Finance was the top loser, tumbling 4.68%, followed by Tech Mahindra, IndusInd Bank, ICICI Bank, SBI, Reliance Industries, Bharti Airtel and HCL Tech. 

 Investors lost ₹3.25 lakh crore in Thursday’s session as the total market capitalisation of BSE-listed companies fell to ₹157.31 lakh crore. 

 “The market had moved-up in expectation of a big stimulus, but the desired fiscal package was not announced in India and a delay of it in U.S. and Europe has changed the trend,” said Vinod Nair, Head of Research at Geojit Financial Services.

‘High infection rates’

“At the same time, the pace of economic recovery is under stress because of a resurgence of high rates of COVID infections,” he said.

 “The margin of safety is low given premium prices and the slowdown in economic recovery. The trend, going forward, will depend on the supportive measures announced in context to the stimulus and commentary of Q2 results,” Mr. Nair added.

All sectors in red

 All sectoral indices closed lower, with BSE telecom, bankex, energy, finance, teck and IT indices plunging as much as 3.54%. 

The broader BSE midcap and smallcap indices nosedived, falling by up to 1.75%. 

 In the rest of Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended up to 2% lower.

 Stock exchanges in Europe slumped up to 3% in early deals.

 Meanwhile, international oil benchmark Brent crude was trading 2.17% lower at $42.38 per barrel.

 In the forex market, the rupee pared its initial gains and settled 5 paise lower at 73.36 against the U.S. dollar. 

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