Markets opened in the red on Thursday with the Sensex down 400 points in the backdrop of Covid-19 cases shooting past 53,000 and some of the index heavyweights skidding over continued outflow of foreign funds.
Losses in index majors Reliance Industries, Infosys and HDFC Bank dragged the 30-share BSE index down 0.82 per cent to 48,775.37, and the broader NSE Nifty down 113.50 points or 0.78 per cent to 14,435.90 in the early trades.
IndusInd Bank was the top loser in the Sensex pack, shedding around 2 per cent, followed by Maruti, SBI, Axis Bank, Bajaj Finance, Reliance Industries, Infosys and HDFC Bank. ONGC, Titan, L&T and Dr Reddy’s were among the gainers.
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The Sensex ended trading on Wednesday 871.13 points or 1.74 per cent lower at 49,180.31, and the Nifty 265.35 points or 1.79 per cent down to 14,549.40. Foreign institutional investors (FIIs) were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1,951.90 crore.
“The uncertainty in the market continues with increasing risk arising from the second wave of Covid-19 attack in India in the context of a third wave in parts of Europe,” says VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
India recorded a single day rise of 53,476 new Covid-19 cases in the last 24 hours, while 251 fatalities have pushed its death toll to 1,60,692 out of a total number of cases of 1,17,87,534.
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Volatility is here to stay for some time before stability emerges, says Vijayakumar, adding that a major trend in the market now is the comeback of pharma stocks in recent days and the weakness in banking stocks.
The heavy selling by FIIs dragged the rupee down to 72.64 against the US dollar on Wednesday. The RBI has allowed the forward USD/INR to appreciate significantly more in maturities up to three months while keeping the USD/INR stable in the 72.40-72.70 range. “Exporters can achieve a competitive exchange rate for their receivables by taking advantage of currency pair appreciation in forward maturities,” says Kshitij Purohit, Product Manager for Currency and Commodities at CapitalVia Global Research Limited.
The Covid scare has left most Asian markets in the red, while bourses on Wall Street ended with significant losses in overnight trade. The global oil benchmark Brent crude was trading 1.41 per cent lower at $63.50 per barrel in the early trading hours in India.
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