You are here: Home » Markets » News
Business Standard

Concerns over US fiscal stimulus, Covid-19 surge roil global markets

Sensex drops 540 points; Wall Street's indices deep in the red

Topics
Coronavirus | US economy | Fiscal stimulus

Sundar Sethuraman  |  Thiruvananthapuram 

loss, economy, shares, stocks, market, investment, savings, gdp, growth, revenue
Nancy Pelosi, the speaker of the US House of Representatives, said the burden is on President Donald Trump to push forward on stimulus talks

The globally were off to a rocky start to the week, with rising Covid-19 infections in the US and Europe — coupled with the delay in the much-awaited deal in the US — keeping investors worried about the economic outlook.

Reacting to the weak sentiment in the world markets, the Sensex ended at 40,145, down 540, or 1.3 per cent — the most since October 15. The Nifty50 index fell 163 points, or 1.4 per cent, to end at 11,768. The equity across Europe and the US (until 9.52 pm IST) also dropped sharply amid worries that the pandemic would continue to hurt business and doubts about US lawmakers reaching an agreement on the economic stimulus package.

Nancy Pelosi, the speaker of the US House of Representatives, said the burden is on President Donald Trump to push forward on stimulus talks. Treasury Secretary Steven Mnuchin blamed Pelosi for holding up an agreement. US Treasuries and the dollar rose as investors sought refuge in safe-haven assets.

Tedros Adhanom Ghebreyesus, the World Health Organization’s director-general, last week said some countries in the northern hemisphere are facing a “dangerous moment” after many nations saw an exponential rise in Covid-19 cases. Many countries, especially in Europe, imposed tighter conditions. Spain announced a nationwide curfew and Italy introduced the most stringent restrictions since May.

chart

“Rising Covid cases in the US and Europe and the delay in US stimulus has had investors’ worried. The Indian are taking a correction from the recent rally, which factored in a lot about an uptrend in earnings growth because of positive September quarter results. The Indian indices are expected to remain weak in the near term and will be driven by the trend of ongoing Q2 result and developments in the US,” said Vinod Nair, head of research, Geojit Financial Services.

10 of the 17 Nifty50 companies which have announced results, so far, either met or exceeded expectations, the data compiled by Bloomberg showed. Experts said the markets could tread cautiously with the US elections around the corner. “Investors are hoping for some clarity over the US stimulus package before the US election. Amid all, domestic earnings announcements are adding to volatility. We feel it’s prudent to maintain positions on both sides in stocks despite the prevailing consolidation bias in the Nifty,” said Ajit Mishra, VP-Research, Religare Broking.

The market breadth was negative with total advancing stocks at 990 and those declining at 1,698 on the BSE. More than two-thirds of the Sensex components ended the session with losses. Bajaj Auto fell 6.1 per cent and was the worst-performing Sensex stock. Mahindra & Mahindra fell 4.5 per cent. Reliance Industries, Tata Steel, Tech Mahindra, and leading banking stocks fell around 3 per cent. Barring one, all the BSE sectoral indices ended the sessions with losses. Energy and metal stocks fell the most, and their gauges fell 3.5 per cent and 3.4 per cent, respectively.

chart

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, October 27 2020. 00:51 IST
RECOMMENDED FOR YOU
.