It has been a sixth straight day of losses for the Sensex with an over 700 points fall, while Nifty too has gave up on 11000 points and was last trading down by 1.71% or 190.4 at 10941 points. The sharp losses come on the back of weak global cues and heavyweight stocks including Infosys, Reliance, TCS, ICICI Bank and HDFC Bank contributed most to the losses today. Also, PSU Banking stocks also pulled down the indices sharply. Broader indices traded weak too with losses of over 1.75% on mid and small cap indexes.
Rise in coronavirus cases:
India is constantly reporting the highest coronavirus caseload of 1lakh infections daily and after falling to its lowest level in a month, cases again were reported to be increasing on Wednesday as per a Reuters report.
India's total coronavirus tally stands at 57.3 lakh with 91,149 deaths. Also some of the European countries and the UK are seeing the second wave of coronavirus infection, leading to imposition of fresh curbs on both business activities as well as travel.
Subdued global cues:
US stocks in overnight trade toppled declining up to 3% with tech stocks seeing huge beating as officials from the Federal Reserve suggested that the condition of US economy is worse than the market suggests it to be. In line Asian markets open lower and at the time of writing this report Hong Kong's Hang Seng was down 1.91%, Japan's Nikkei traded weak by 1.11% while South Korea's Kospi was down 2.59%.
Global economic recovery concerns continue to weigh:
Macro-data highlighted that US business activity in the month of September cooled off as any gains at factory level was compensated with the decline in service activity. Also, the weekly US jobless claim data is awaited. In the Eurozone too business growth too was dampened as Covid 19 resurgence led the government to introduce curbs again.
Further comments from Federal Reserve officials which pointed that the US continues to be in a " deep hole, regardless of the comeback we've seen", worried investors.
For India, rating agencies have estimated growth to be negative for the FY21 period, nonetheless the ambiguity on the fall is causing investors' nervousness. Also, the earlier estimated V-shaped recovery seems to be distant as people continue to spend less owing to the uncertain environment.
The September F&O contract series ends today and because of the position roll-over, the market is witnessing sector and stock specific movement. India VIX which is a measure of the volatility on the frontline indexes was up 7.67% at the time of writing this report.