Sensex Drops Over 200 Points In Early Trade; Financial, Pharma Stocks Worst Hit

Losses in financial and pharmaceutical stocks pulled the markets lower

Domestic stock markets started Thursday’s session on a negative note tracking a pause in global equities after the US central bank said that recovery from the pandemic would take years triggered. The S&P BSE Sensex index fell as much as 0.69 per cent – or 236.19 points – to 34,010.86 in the first few minutes of trade, having started the day down 32.36 points at 34,214.69. The broader NSE Nifty 50 benchmark declined to as low as 10,047.10, after opening weaker at 10,094.10 compared to its previous close of 10,116.15. Losses in financial and pharmaceutical stocks pulled the markets lower however gains in automobile and consumer goods shares offered some support.

At 9:24 am, the Sensex traded 164.62 points – or 0.48 per cent – lower at 34,082.43 while the Nifty was down 54.60 points – or 0.54 per cent – at 10,061.55.

Analysts awaited macroeconomic data due this week for more clarity on monetary policy going forward.

Official data on consumer inflation will be released at 5:30 pm on Friday. Consumer inflation – or the rate of increase in retail prices determined by the Consumer Price Index (CPI) – is likely to have moderated to a six-month low of 5.50 per cent in May, according to a poll of 35 economists by news agency Reuters.

Equities in other Asian markets eased after a downbeat economic outlook from the Federal Reserve stoked speculation the US central bank would have to add to already historic levels of stimulus to safeguard recovery.

Still, stock losses were modest given the scale of their recent rise. While MSCI’s broadest index of Asia-Pacific shares outside Japan was last seen trading 0.02 per cent lower, following 10 sessions of gain, Japan’s Nikkei 225 benchmark was down 1.05 per cent.

Hong Kong’s Hang Seng index was down 0.44 per cent and South Korea’s KOSPI index down 0.27 per cent, but China’s Shanghai Composite benchmark was up 0.16 per cent.

The E-Mini S&P 500 futures were last seen trading 0.57 per cent lower in Asian trade, indicating a negative start for the US markets on Thursday.

Overnight in the US, Wall Street slipped as losses in financial stocks countered a boost from the technology sector. The S&P 500 and Dow Jones Industrial Average indices closed 0.53 per cent and 1.04 per cent lower respectively, but the technology-heavy Nasdaq Composite managed to eke out a 0.67 per cent gain.

On Wednesday, the Sensex had ended 290.36 points – or 0.86 per cent – higher at 34,247.05, and the Nifty settled at 10,116.15, up 69.50 points – or 0.69 per cent – from its previous close.

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