Sensex, Nifty Fall 2% Tracking Global Markets As COVID-19 Fears Resurface

Analysts awaited macroeconomic data due after market hours for more clarity on monetary policy

Domestic stock markets trimmed early losses after plunging more than 3 per cent on Friday tracking global equities, which tumbled over growing concerns that a resurgence of coronavirus infections could stunt the pace of reopening economies. The S&P BSE Sensex index opened 1,101.68 points lower at 32,436.69, and the broader NSE Nifty 50 benchmark started the day at 9,544.95, down 357.05 points from its previous close, a day after a selloff in financial stocks dragged the markets 2 per cent lower. A selloff across sectors – led by financial stocks, especially state-run banks – weighed on the benchmark indices.

Here are 10 things to know about the markets today:

  1. However, the markets began to recover some of those losses soon after opening. At 9:27 am, the Sensex traded 730.04 points – or 2.18 per cent – lower at 32,808.33, while the Nifty was down 235.15 points – or 2.37 per cent – at 9,666.85.

  2. Analysts awaited macroeconomic data due after market hours for more clarity on monetary policy going forward. Official data on consumer inflation and industrial production will be released at 5:30 pm.

  3. 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.

  4. Equities in other Asian markets followed Wall Street, which saw its worst day since mid-March, with MSCI’s broadest index of Asia Pacific shares outside Japan last seen trading 1.12 per cent lower.

  5. While Japan’s Nikkei 225 benchmark index traded 1.52 per cent lower at the time, China’s Shanghai Composite, Hong Kong’s Hang Seng and South Korea’s KOSPI barometers were down 0.51 per cent, 1.03 per cent and 2.48 per cent respectively.

  6. The E-Mini S&P 500 futures were up 1.07 per cent in early Asian trade, indicating a positive start for US markets on Friday.

  7. Overnight in the US, the S&P 500 index plunged 5.89 per cent in its steepest one-session loss since March 16, following renewed fears of a coronavirus resurgence as US states gradually reopen their economies after a nearly countrywide shutdown. The Dow Jones Industrial Average tumbled 6.90 per cent, whereas the tech-heavy Nasdaq Composite lost 5.27 per cent.

  8. Cases of the disease have jumped in several US states in recent days, raising concern among experts who say authorities have loosened restrictions put in place to contain the spread too early.

  9. Investors also reacted to dour economic forecasts from the Federal Reserve. The US central bank released a gloomy economic outlook at the end of its two-day monetary policy meeting on Wednesday. Chair Jerome Powell warned of a “long road” to recovery.

  10. Global equities have surged since late March, with the Nasdaq reaching record highs and the S&P 500 climbing over 40 per cent from March lows as the number of coronavirus cases nationwide declined modestly.

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