Indian markets log their biggest loss in almost 5 months

Indian equities logged their biggest loss in about five months as benchmark indices crashed by close to 3% on Thursday, continuing the losing streak for the sixth continuous day. With today's rout the Sensex has lost about 2,749 points in six days (7% in percentage terms).

At the end of the day's trade, the 30-share BSE Sensex closed at 36,553.60, down 1,114.82 points (2.96%). Similarly broader index 50-share NSE Nifty closed at 10,805.55, down 326.30 points (2.93%). The last time markets fell bigger than this was on May 4, when Sensex had crashed by 2,002 points in a day's trade.

As the equity investors lost Rs 3.87 lakh crore in during the day's trade, the total losses in past six trading sessions have now bulged to Rs 11.23 lakh crore.
Analysts say that markets are getting realistic and that is what is leading to this correction.

"As Fed's buying programme and liquidity ebbs, euphoria has been replaced by a more pragmatic approach to evaluating risk vis-a-vis US election, Trade wars, Pandemic and the teetering domestic GDP," said Anubhav Srivastava, Partner, Infinity Alternatives.

With the rupee depreciating by 33 paise against the US dollar to close at 73.90, the foreign investors led the sell-off for Indian equities. The FIIs, in the past five trading sessions, have withdrawn a net of Rs 7,900 crore from the Indian equity markets.

Among the sectors, IT and metals were worst hit, with Nifty Metal and Nifty IT crashing by 4.24% and 4.2% each, respectively. The Nifty PSU Banks Index crashed by 3.89%. On the other hand, India VIX, which denotes the volatily in the Indian markets was up 12.01% at 23.51.

As a result of continuous correction in equities, since Monday, Indian benchmarks have started giving 52-week negative return again after a hiatus of two months. As on date, the Sensex is giving 52-week return of negative (-) 6.51%.

Analysts are advising further caution, as they believe going forward as it is unlikely the pandemic fears will allay in the near future, if anything this could accelerate.