Sensex recovers 835 pts despite negative global cues

Sensex recovers 835 pts despite negative global cues
The broader markets underperformed the benchmark indices with BSE Midcap and Smallcap indices declining by 4.7 per cent and 5.3 per cent respectively during the week.

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Sensex closes at 37,388. (File)
Benchmark indices on Friday almost recouped the losses in Thursday’s trade despite negative global cues and uncertainties surrounding the Covid pandemic and therefore the economic recovery. The Sensex, which plummeted 1,114 points on Thursday, gained 835 points to 37,388.66 and therefore the NSE Nifty Index rose 241 points at 11,050.25.

Vinod Nair, Head of Research, Geojit Financial Services, said, “This relief rally was in spite of mostly negative global cues and appeared to be supported the hope of more stimulus measures by the govt . On a weekly basis, the recovery today enabled the benchmark indices to limit to around 3.8 per cent loss for the week. FPIs have net sold on the brink of Rs 2,000 crore thus far this month … which indicates the uncertain trend within the markets after an enormous inflows in August.”

“The factors which prevailed against the markets just like the sell-off within the tech sector, the emergence of the second wave of the pandemic and probability of geopolitical tensions centering around Chinese stand-off etc may still influence the course of the markets within the coming weeks,” said Joseph Thomas, Head of Research, Emkay Wealth Management. However, expectations of another fiscal package from the govt before the festival season may be a factor which will endow the markets with some strength, he said.

According to Deepak Jasani, head—retail research, HDFC Securities, the investor sentiment was dented as rising coronavirus cases led to the likelihood of fresh lockdowns in some European countries, which could further hamper the pace of worldwide economic recovery. Firmness within the US dollar also put pressure on domestic shares.

The broader markets underperformed the benchmark indices with BSE Midcap and Smallcap indices declining by 4.7 per cent and 5.3 per cent respectively during the week.

Among the sectoral indices, telecom index fell over 10 per cent, followed by media (down by 9.3 per cent).
Metal and PSU bank index were down 8 per cent.

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