Domestic stock markets saw their worst tumble in three weeks on Thursday with benchmark indices snapping out of a rally that lasted 10 straight days, as a resurgence of COVID-19 infections in parts of Europe spooked investors across the globe.
Result: The Sensex index shed 1,097.98 points – or 2.69 per cent – to 39,696.76 at the weakest level during the session, and the broader Nifty benchmark dropped to as low as 11,666.30, down 304.75 points – or 2.55 per cent – from its previous close. 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.
Investor wealth on Thursday eroded by Rs 3.25 lakh crore; the volatility expected due to the US presidential elections, in the face of concerns that the recovery in the world economy is flagging, sent investors chasing after safe-haven assets. Also, downbeat comments from US Treasury Secretary that a stimulus deal was unlikely before the November 3 vote also hurt the global sentiment. The weak data in China has not helped matters either.
Geir Moulson adds from Berlin: But most worrisome was the record daily infection figures in Germany, the Czech Republic and Italy, which has added to fears that Europe is running out of chances to control its latest outbreak. These fears have got reinforced with no sign of a vaccine hitting the market anytime soon.
The Czech Republic, Belgium, the Netherlands, Spain, France and Britain are among the countries causing particular concern. The Czech Republic is facing a medical ‘collapse’ with the army rigging up field hospitals as the country suffers the worst infection rate in Europe.
After escaping the first wave relatively lightly, the Eastern European country has been battered by a resurgence in recent weeks which has infected more than 4,000 hospital workers and forced the closure of schools, bars and restaurants.
While Germany, the European Union’s most populous nation, is still in comparatively good shape, alarm bells have started ringing there too. On Thursday, the country’s national disease control centre reported 6,638 cases over 24 hours – exceeding the previous record of nearly 6,300 set in late March, although testing in the country of 83 million has expanded greatly since then.
Italy, which so far has been spared the worst of the second wave, on Wednesday also recorded its biggest single-day jump in infections since the start of the pandemic.
The number of new coronavirus cases in the United States, too, is surging once again after growth slowed.
