Sensex, Nifty End Lower, Broader Markets Outperform
The equity markets failed to overcome the selling pressure and ended the week with negative figures as the focus of the investors and nation has shifted to the sudden rise in Covid cases which has led the markets to post losses in the entire week. The BSE Sensex closed lower by 202.22 points at 47,878.45, while the Nifty-50 closed at 14,341.35, down by 64.80 points.
Among the sectors, all sectors ended with losses except for Energy and PSU Bank. The IT and FMCG sector stood as the top losers among all other sectors on sustained selling pressure throughout the day. Shares of Britannia and Wipro ended among the top index losers as they declined over two per cent each.
However, the BSE Sensex saw healthy buying in the afternoon trade in shares of IndusInd Bank(+1.59 per cent), Axis Bank(+0.93 per cent), and Power Grid Corp(+3.51 per cent) which led the index to reach its day's high of 48,265.39.
The broader markets outperformed amid volatility in the markets as the BSE Midcap and Smallcap indices closed higher by 0.16 and 0.51 per cent each. The Smallcap cap index capped major gains in shares of Confidence Petroleum (+20 per cent), HFCL(+13.61 per cent), and Apcotex Industries(+12.29 per cent).
Why are the share markets falling?
The ongoing wave of the Coronavirus in the country coupled with the shortage of oxygen and drug supply for the treatment of patients has created a negative impact on the Dalal-Street and the entire economic progress of the country.
Rating agencies downgrading their GDP growth projections by upto 1 per cent, negative impact of Covid cases on the economy added to the already negative sentiments in the domestic markets, said experts.
"Many states have announced varied degrees of restriction on movement of people depending on the severity of the situation in their region. This is expected to impact the economy in this quarter and there have been downgrades to India’s growth in FY22 by upto 1%," said Hemant Kanawala - Head – Equity, Kotak Mahindra Life Insurance Co. Ltd.
Moving further, the vaccination drive will be monitored by the market participants and the progress of the phase three vaccination drive is likely to create a positive impact on the market sentiment.
The pace of vaccination will be crucial for quicker normalization of economic activity, Kanawala added.
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