Equities tumble on global sell-off, Sensex crashes 394 points

By: |
August 21, 2020 12:17 AM

The markets traded in the red throughout the day and recovered slightly before closing. The weekly options expiry also added to the market volatility on Thursday.

The markets witnessed a gap down opening, tracking cues from its Asian peers that were trading in the red.The markets witnessed a gap down opening, tracking cues from its Asian peers that were trading in the red.

Equities plunged on Thursday in tandem with a global sell-off after the US Fed’s gloomy economic outlook spooked investors across the world. Stalling of the fiscal stimulus in the US also hurt the investor sentiment. The Nifty fell by 96.2 points, or 0.84%, to close at 11,312.2 while the Sensex declined 394.4 points, or 1.02%, to close at 38,220.39.

The markets traded in the red throughout the day and recovered slightly before closing. The weekly options expiry also added to the market volatility on Thursday.

The markets witnessed a gap down opening, tracking cues from its Asian peers that were trading in the red. The stock markets in China, Hong Kong and Taiwan were down between 1.3% and 3.26%. South Korea’s Kospi was down by 3.6%. They tracked the losses of the Wall Street overnight where Dow Jones, S&P 500 and Nasdaq declined. This happened because the Fed’s minutes from the July meetings stated that the Federal Reserve had doubts about the US economy’s recovery. Additionally, US- China tensions and rising novel Coronavirus cases in certain countries like South Korea led to investors dumping risky assets.

On Thursday, which is the weekly options expiry, the markets saw strong volumes. The futures and options segment on the NSE witnessed a turnover of Rs 34.98 lakh crore whereas the cash segment saw a turnover of Rs 56,456.18 crore. This is against the six-month average of Rs 14.9 lakh crore and Rs 51,793.2 crore. FPIs on Wednesday bought equities worth $60.3 million whereas domestic institutional investors sold stocks worth $12.7 million.

Financials were also responsible for dragging the stock markets down. The Nifty Bank declined by 1.29% to close at 21,999.45, led by HDFC Bank, ICICI Bank and Axis Bank.

A report by HDFC Securities Institutional Research Desk said, “We believe the Q2 or Q3 results will be better indicators of the underlying demand conditions and stress in the banking sector as supply chains settle down, moratorium period ends and the festive season kicks in.”

Major losers on the Nifty were Tata Motors, HDFC, Axis Bank, ICICI Bank and Wipro, down by 2.64%, 2.28%, 2.16%, 2.03% and 1.88%. Significant gainers were NTPC, ONGC, Powergrid Corporation, Coal India and BPCL, up by 6.87%, 3.33%, 2.59%, 2.37% and 2.01%.

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