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Sensex Sinks 1,066 Points, Worst Day In 3 Weeks Amid Global Selloff

Analysts say profit-booking in IT stocks dragged the markets lower
Analysts say profit-booking in IT stocks dragged the markets lower
  1. A selloff in IT and financial stocks pulled the markets lower. The Sensex ended 1,066.33 points (2.61 per cent) lower at 39,728.41, and the Nifty settled at 11,680.35 for the day, down 290.70 points (2.43 per cent) from its previous close - their worst single-day loss since September 24. (Track SensexNifty Here)
  2. Bajaj Finance, Tech Mahindra, ICICI Bank, IndusInd Bank, Reliance Industries, SBI and HDFC Bank, closing between 3.54 per cent and 4.98 per cent lower, were the worst hit among 47 laggards in the Nifty basket of 50 shares. 
  3. European markets fell to two-week lows, knocked by tougher curbs in London and Paris to fight a second wave of the COVID-19 pandemic, with no breakthrough in Brexit trade talks also a dampener. Globally, concerns that a resurgence in the coronavirus pandemic could lead governments to again shut down economies spurred profit-taking, particularly after the recent rally.
  4. Also, downbeat comments from US Treasury Secretary Steven Mnuchin that a stimulus deal was unlikely be made before the November 3 vote in the US hurt global market sentiment.
  5. Reliance Industries, HDFC Bank and ICICI Bank were the biggest drags on Sensex, together accounting for a loss of nearly 500 points in the index. 
  6. Infosys shares closed 2.47 per cent lower at Rs 1,108 apiece on the BSE, having hit a record high of Rs 1,185 during the session, a day after the country's second largest IT services exporter reported a better-than-expected quarterly profit, and raised its annual revenue growth forecast.
  7. Analysts say profit-booking in IT stocks - which drove the recent rally - dragged the markets lower. "The ongoing volatility is characteristic to bull markets. The psychological mark of 12,000 has obviously attracted some (portfolio) realignment and we have seen the defensive sectors like IT and pharma in the red today," Anand James, chief market strategist at Kochi-based Geojit Financial Services, told NDTV.
  8. The NSE's India VIX index - which gauges the expectation of volatility in the near term - rose 9.14 per cent, its highest since September 25. "China's fresh rhetoric on war may have prompted traders to take their eyes off the rally, but with Diwali around the corner, markets look to be betting on earnings surprises to help with the next leg of upsides," Mr James added.
  9. Banking and financial services shares - which have a weightage of 33 per cent in the Nifty 50 index - also plummeted, adding to the broad-based selloff. The Nifty Bank index, which tracks 12 major lenders in the country, ended 3.36 per cent lower, dragged by HDFC Bank and Kotak Mahindra Bank. The Nifty Financial Services index fell 2.95 per cent.  
  10. On Wednesday, the Supreme Court said any delay in implementing a waiver on "interest on interest" on loans up to Rs 2 crore is not in the interest of the common man. The top court was hearing a batch of petitions on whether banks should levy compound interest on borrowers choosing to defer their loan repayments during the coronavirus crisis.
(With inputs from agencies)