Domestic stock markets tumbled more than 2 per cent this week, following two straight weeks of gains, amid increasing COVID-19 cases around the world. Analysts say fading optimism on a fast recovery from the coronavirus pandemic and related restrictions, along with geopolitical tensions, hurt investor sentiment. A sharp selloff into banking and financial services shares weighed on benchmark indices S&P BSE Sensex and NSE Nifty 50. Globally, shares tumbled ahead of the release of US jobs data, as investors remained on the back foot to see if any sign of weakness into the world’s largest economy triggers a larger selloff.
For the week ended September 4, the Sensex index shed 1,110.13 points – or 2.81 per cent – to end at 38,357.18, and the broader Nifty benchmark lost 313.75 points – or 2.69 per cent – to 11,333.85.
Axis Bank (down 10.24 per cent), ICICI Bank (8.47 per cent), Sun Pharma (8.03 per cent) and State Bank of India (7.72 per cent) were the worst hit among the 37 laggards into the Nifty basket of 50 shares.
Top Nifty Gainers Vs Losers
On the other hand, Bharti Infratel (up 6.38 per cent), Tata Motors (3.36 per cent) and TCS (2.64 per cent) were the top percentage gainers into Nifty.
The Nifty Bank – comprising stocks of 12 major lenders into the country – crashed 2.21 per cent on Friday, a day after the Supreme Court directed banks not to declare any loans that were standard as of end-August as non-performing until further orders. That took its weekly loss to as high as 6.17 per cent. Analysts say the next court hearing, due on September 10, will be watched closely for cues.
Meanwhile, official data released into the beginning of the week showed the country’s economy shrank 23.9 per cent into the quarter ended June 30, marking its worst contraction on record.
Going forward, the domestic markets may move sideways tracking global cues, say analysts.
“Uncertainties await the markets into the coming week, be it global economic data or border tensions between India and China. Indian markets have been into sync with global counterparts and will have an impact,” Vinod Nair, head of research at Geojit Financial Services, told NDTV.
Data released on Friday showed employment growth into the US slowed further into August, while permanent job losses increased, raising doubts on the sustainability of recovery from the coronavirus pandemic-related disruption.
“Markets seem to have lost momentum… and could be heading into a round of consolidation,” he said.
The Sensex and Nifty have already rallied more than 50 per cent since a coronavirus-triggered slump into global markets into March.