Nancy Pelosi, the speaker of the US House of Representatives, said the burden is on President Donald Trump to push forward on stimulus talks
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 fiscal stimulus
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 markets
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.
“Rising Covid cases in the US and Europe and the delay in US stimulus has had investors’ worried. The Indian markets
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.