On Thursday, the main indices fell along with other world markets because the fear of a second wave of contagion overshadowed investor sentiment. The Federal Reserve’s assessment of long-term damage to the US economy has also tempered risk appetite.
Finished in 9902, a drop of 2.1% or 214 points. The gender, on the other hand, decreased by 709 points, or 2.07%, and ended the session with 33,538 points. It is the largest one-day loss on both indices since the 18th century. Mei.
Most stocks worldwide fell by almost 2%, while the US Wall Street futures recorded another day of losses.
The president of the U.S. Federal Reserve, Jerome Powell, has suggested that the pandemic could cause long-term damage to the U.S. economy. Powell added that he doesn’t even think about raising interest rates and said he is worried that the labour market will barely recover.
The Fed’s statement implied that the economic recovery would be slower than was thought. The markets were surprised that there was no V-shaped recovery. So there was a worldwide sale. Although it will take a long time for the global economy to recover, no one will benefit, said Andrew Holland, CEO of Avendus Capital Alternate Strategies.
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The expected opinion of the Federal Open Market Committee has triggered a negative reaction in global markets, while the Fed has reduced hopes of a rapid recovery of the U.S. economy, said Vinod Nair, Director (Research) at Geojit Financial Services.
Investors are concerned that countries, including the United States, need to prepare for a second wave of contamination. There was a peak in the west and south of the US that unblocked the situation a few weeks ago. India has also relaxed restrictions, although the spread of Kovid-19 has not stopped.
As the infection rate remains high, markets are also concerned about possible additional containment measures that could be introduced. This could offset the optimism of the past two weeks, when investors have completely revitalized the economy, Mr Nair said.
The last market decline came after a sharp rise in recent weeks. Before last fall, the benchmarks rose 15% in just three weeks, raising concerns about their valuation. Given the good grades, the correction is healthy. The situation is complex and we do not have the necessary flexibility from the government. Until we see how big cities like Mumbai smooth the curve, the supply chain problems will remain, according to Abhimanyu Sofaat, V-P (Research Centre), IIFL.
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Analysts say the positioning of global indices will continue to dictate the market trend. They advised their clients to limit their leveraged transactions and maintain existing hedged positions.
Wider markets continued to outperform, with the Nifty SmallCap and MidCap indices down just 0.9% and 1.3% respectively.
The size of the market was negative: 1,018 shares increased, while 1,533 shares decreased due to BSE. All but five Sensex components ended the session at a loss. The State Bank of India decreased by 5.6%, the highest rate among the Sensex components. The solar park decreased by 5.1%, while Maruti Suzuki and Bajajj-Finance decreased by 4.2% and 4.1% respectively. All 19 indexes of the BSE industry ended the meeting with losses. Telecommunications and metallurgy declined the most, while their sector indices fell by 4% and 2.9% respectively.
Vodafone Idea fell by 13%. The company told the Supreme Court that it did not have enough money to pay its salaries and that it could not provide a bank guarantee in the AGR case.