In the past few weeks, the domestic markets witnessed strong bullish sentiments. On Monday, bears charged ahead as Sensex declined by more than 500 points while Nifty fell by around 140 points.
While metal, auto, and IT stocks witnessed a sharp decline, the banking stocks also suffered losses. Bajaj Auto was down by 5.72 per cent, Tata Steel fell by 3.65 per cent, SBI was down by almost 3 per cent, etc.
On the other hand, Nestle India gained by more than 2 per cent as the company announced a 10 per cent increase in the revenue for Q3CY20. Its brands such as Maggi noodles & sauces, Munch, Nestle Classic, and Nescafe Sunrise saw double-digit growth during the quarter.
Weaker sentiments in the markets were due to –
Hiccups in Future-RIL deal
Singapore International Arbitration Centre (SIAC) passed an interim order asking Future Group to pause its plans of selling its retail business to RIL thus, dragging shares of RIL down by 3.15 per cent.
Increasing Coronavirus cases
A rise in Coronavirus cases was seen around the world with increased hospitalisations and deaths. As the second wave of COVID-19 is considered to have been erupted in Europe, Spain declared a state of emergency while France reported a sharp rise in the number of cases. US has also seen its highest-ever number of new COVID-19 cases in the past two days.
The recent bullish sentiments in the markets have resulted in blue-chip stocks being just a few centimetres away from their record highs. Many scrips on BSE and NSE have already been recording strong gains. In such a situation, there is a risk of rising volatility, which seems to be panicking investors as the US elections are also round the corner.