By Administrator_ India
The BSE Sensex posted its biggest single-day fall in four months after investor sentiment turned sour on the Federal Reserve’s dire assessment of the US economy and rising Covid-19 infections forcing many countries to re-enforce restrictions.
The Sensex plunged 1,115 points, or 3 per cent, to end at 36,554, its lowest close since July 10 and the biggest drop since May 18.
The Nifty fell 326 points, or 3 per cent, to end the session at 10,805.
US Federal Reserve Vice-Chair Richard Clarida said on Wednesday the US economy remained in a “deep hole” of joblessness and weak demand and called for more stimulus measures from policymakers.
Experts said the comments dashed hopes of a swift economic recovery. Also, many feared with the US election around the corner, the administration would not be able to provide a strong stimulus package.
“The Fed virtually pleading with Congress for a stimulus has worsened sentiment. The dollar strengthening has taken away expectations of money flows in the short term. The US election will bring its own volatility. Fears of a contested outcome will continue to keep investors in tenterhooks,” said Andrew Holland, chief executive officer, Avendus Capital Alternate Strategies.
The benchmark indices have declined 7 per cent each in the past six trading sessions.
On Tuesday Jay Powell, chairman of the Federal Reserve, warned Congress the US economic recovery would suffer if lawmakers failed to pass a new fiscal stimulus package.
Investors and policy analysts expected Congress and the White House would agree on a new fiscal package, in addition to the $3 trillion approved at the start of the pandemic. But differences over the size and detail of a deal have led to a stalemate.
The market breadth was negative with the number of declining stocks being 2,064 and those advancing 583.
All the Sensex components barring one ended the session with losses. IndusInd Bank was the worst-performing Sensex stock and ended with a loss of 7.1 per cent. Bajaj Finance and Mahindra & Mahindra fell 6.6 and 6.4 per cent, respectively.
All the BSE sectoral indices ended in the red. IT and tech stocks fell the most, and their gauges tanked 4.5 per cent and 4.3 per cent, respectively.