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Published on 22/09/2020 11:19:49 AM | Source: Reuters

Nifty, Sensex slip as surging virus cases raise fears of prolonged economic slump

Posted in Stock Market| #Sensex #Stock Market #NSE #BSE #Nifty

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BENGALURU  - Indian shares fell on Tuesday following concerns that rising coronavirus cases could stall an economic recovery, while fears of fresh lockdowns in some European countries threatened to further hit global supply chains and weighed on domestic sentiment.

The broader NSE Nifty 50 index  fell 0.70% to 11,175.95 and the S&P BSE Sensex  was down 0.8% to 37,746 by 0504 GMT. Both the indexes fell more than 2% on Monday.

In India, total coronavirus cases touched 5.6 million as of Tuesday. European countries mulled tightening restrictions to curb a sharp resurgence in cases, while the COVID-19 death toll in the U.S. approached 200,000.

"Markets think that some sectors which picked on opening up of the economy such as commodities, auto and real estate will feel the heat again with rising cases and lockdown restrictions coming back in certain countries," said Saurabh Jain, assistant vice president at SMC Global Securities Ltd.

Among the top losing sectors, the Nifty metals index  slid 1.2%, Nifty realty  fell 3.0% and Nifty public sector was down 2.0%.

Shares of Adani Group's listed companies fell after a report on alleged suspicious financial transactions from Seychelles.

India's federal police said on Monday they had registered a case against dairy company Kwality Ltd  and its directors for allegedly cheating a consortium of banks of around 14 billion rupees ($190 million).

Meanwhile, Asian shares dropped on Tuesday due to concerns about new pandemic lockdowns in Europe and possible delays in fresh U.S. stimulus.

"There is no follow-up buying at the dips. Lot of companies want to raise money and liquidity is getting dried up," AK Prabhakar, head of research at IDBI Capital said.

Shares of steel equipment maker GMM Pfaudler fell 10% after the company said on Monday that its promoters planned to sell about 17.6% stake.

 

(Reporting by Nallur Sethuraman in Bengaluru; Editing by Uttaresh.V and Shounak Dasgupta)