Before Wednesday's fall, the benchmark indices had surged 12 per cent in November, underpinned by record buying by foreign portfolio investors
on the Covid-19 vaccine front, the formal start of US President-elect Joe Biden’s transition to power, and news
reports about Janet Yellen’s possible elevation to US Treasury secretary had helped the markets
scale fresh highs this week.
However, on Wednesday, concerns about a challenging economic outlook amid the pandemic and restrictions to curb surging coronavirus infections led to profit-booking across the counters.
“The market rally, which was led by developments on vaccine and FPI inflows, came to a halt today due to profit-booking across sectors in the second half of the trading session. We can expect profit-booking to continue in our domestic market in the short term, as the liquidity-driven rally can take a pause, having reached an all-time high on a monthly basis. This money was triggered by the results of the US elections that unleashed high amounts of funds, which were put on hold. FIIs may take a breather and check for the next phase of policies in the US and Europe for 2021,” Vinod Nair, head of research at Geojit Financial Services.
Analysts said investors will keenly watch the bunch of economic indicators set to be released later by central banks and governments. Investors will also look for more clarity on further fiscal or monetary stimulus to support the economic recovery.
The market breadth was negative with total advancing stocks at 1,126 and those declining at 1,662 on the BSE. All the Sensex
components, barring three, ended the session with losses. Kotak Mahindra Bank was the worst-performing Sensex
stock, and ended the session with a loss of 3.2 per cent. Axis Bank, Sun Pharma and HDFC Bank fell 3.2 per cent, 2.6 per cent and 2.5 per cent, respectively. Barring one all the BSE sectoral indices ended the sessions with losses. Realty and telecom stocks fell the most, and their gauges fell 2.2 per cent each.
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