The S&P BSE Sensex and NSE Nifty 50 indexes fell sharply in trade on Thursday on the back of weak global cues after the US Federal Reserve indicated that the US economy will shrink 6.5 per cent in 2020 and the unemployment rate to be 9.3 per cent at year’s end as the globe battles COVID-19 pandemic. The Sensex fell as much as much as 767 points and the Nifty 50 index briefly fell below 9,900 mark weighed down by selling pressure across sectors.
The Sensex ended 709 points or 2 per cent lower at 33,538.37 and the Nifty 50 index dropped 2.12 per cent or 214 points to close at 9,902.
Markets across the globe were spooked after comments from the US Federal Reserve. Germany’s DAX, England’s FTSE 100 and France’s CAC 40 indexes slumped 2 per cent each.
US stock future contracts were also trading with deep cuts as S&P 500 futures fell 1.5 per cent.
In the first economic projections of the pandemic era, US central bank policymakers put into numbers what has been an emerging narrative: that the shutdowns, restrictions and other measures used to battle a health crisis will echo through the economy for years to come rather than be quickly reversed as commerce reopens.
Some 20 million or more people have been thrown out of work since February, and Fed Chair Jerome Powell acknowledged it could take years for them to all reacquire jobs – an economic blow that is falling heaviest on minority communities at a time when mass protests over police brutality have thrown a new spotlight on racial inequality in the United States.
Back home, all the 11 sector gauges compiled by the National Stock Exchange were trading lower led by the Nifty PSU Bank index’s nearly 4 per cent fall. Nifty Bank, Auto, Financial Services, Metal, Pharma and Private Bank indexes also fell around 2 per cent each.
44 out of 50 shares in Nifty ended on a weak note. Bharti Infratel was top Nifty loser, down 9 per cent. Zee Entertainment, State Bank of India, Sun Pharma, Tata Motors, Eicher Motors, Bajaj Finance, Grasim Industries, Vedanta and ICICI Bank also fell between 3-6 per cent.
On the flipside, IndusInd Bank, Hero MotoCorp, Nestle India, Power Grid, Mahindra & Mahindra and Bajaj Auto were among the notable gainers.