Indian shares fell sharply today, extending losses to the sixth day amid a global selloff. Fears of fresh coronavirus restrictions amid increasing virus cases and uncertainty over US stimulus package made investor jittery who sought the safety of US dollar – the world’s most liquid currency. The Sensex fell as much as 871 points today to 36,796 while the broader Nifty50 index slumped below 10,900.
Here are 10 updates:
1) In six sessions, Sensex has plunged more than 2,500 points with about ₹10 lakh crore of investors wealth wiped out over six days.
2) “Given the uncertainty to economic outlook from the second wave of covid, US presidential elections and the US stimulus package, investors are shunning risky assets. Commodities and equities have sold off,” said Abhishek Goenka, Founder and CEO, IFA Global.
3) “The US dollar has strengthened, especially against majors and that has further exacerbated the fall in commodities,” he added.
4) The dollar index, which measures the US dollar against a basket of six major currencies, stood at two-month high of 94.480 today.
5) “Resurgence of the US dollar as all bets were against it is the biggest short term risk for emerging market equities,” said investment advisor Sandip Sabharwal said in a tweet.
6) “The index continues to remain weak and any rally up can be used to short this market. 10900-10950 is a support range for the market so traders can book profits at the current juncture and use any opportunity to short the October series futures contract at higher levels for a target of 10750. The resistance on the upside is at 11300,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
7) The Indian rupee also slumped to nearly one-month low of 73.96 against the US dollar.
8) Gold, which is typically considered a safe-haven asset in times of economic uncertainty, has also been caught in this selloff amid the rush to the safety of the US dollar. In futures market, gold prices are down about ₹2,500 per 10 gram on MCX this week.
Among other commodities, global oil prices dropped today to slide below $40 a barrel, weighed down by concerns that U.S. economic recovery is slowing as the coronavirus outbreak lingers, while a renewed wave of COVID-19 cases in Europe have led to reimposed travel restrictions in several countries.
9) Top US Federal Reserve officials have voiced concerns about the ongoing impasse on additional fiscal stimulus, saying that the US economy was still in a “deep hole”.
10) Among the Sensex 30 stocks, just two – HUL and Nestle – were in the green. Maruti Suzuki, IndusInd Bank, Tata Steel, Bajaj Finance, TCS and M&M were down between 3% and 5%.
