Sensex, Nifty fall for sixth straight session: Key reasons behind this slump

NEW DELHI: Equity indices continued to slump for sixth straight session on Thursday with the benchmark BSE sensex falling over 1,100 points in late afternoon trade as fears of fresh pandemic restrictions kept domestic investors jittery amid a heavy global selloff in stocks.
At 3:10 pm, the 30-share BSE index was trading 1,107 points or 2.46 per cent lower at 36,742; while the broader NSE Nifty was down 268 points or 2.41 per cent at 10,863.
On NSE, all sub-indices were trading in red dragged by Nifty IT, Metal, Auto and PSU Banks.
Here are the top reasons behind the slide:
* Weak global cues
Stock markets across Asia’s emerging economies sank on Thursday as concerns about rising coronavirus cases in the developed world hammered investors’ risk appetite, driving capital into the dollar and other traditional safe havens.
With the tone set by a drop on Wall Street overnight, Singapore’s Strait Times index was also caught up in the action, losing almost 1% as early falls in China sparked losses of as much as 2.5% across the region.
* Surge in Covid-19 cases
Resurgence of Covid cases in countries like the UK, Canada, Spain, France, Canada and Netherlands have spiked fears to fresh lockdowns, thereby making investors jittery.
India’s Covid-19 caseload mounted to 57,32,518 with 86,508 people testing positive in a day, while the death toll climbed to 91,149 with 1,129 people succumbing to the disease in a span of 24 hours, home ministry’s data updated at 8 am on Thursday showed.
* Economic uncertainty
The coronavirus crisis is lasting longer than expected and it will take some countries years to return to growth, the number 2 official at the International Monetary Fund (IMF) said.
US Federal Reserve policymakers vowed to keep interest rates near zero, while business activity cooled in September, with gains at factories offset by a retreat at services industries.
Euro zone business growth ground to a halt this month as fresh restrictions to quell a resurgence in infections slammed the services industry into reverse.
Some Bank of Japan board members warned a resurgence in the pandemic could delay an economic recovery and destabilise its banking system by pushing more companies under, minutes from the bank’s July rate review showed.
* F&O expiry
Markets are also witnessing volatility amid derivatives expiry as traders look to place their positions.

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