Sensex, Nifty50 fall for the third consecutive day due to rising Covid concerns – all sectors except IT decline

• Indian benchmark indices Sensex and Nifty50 closed in the red on Thursday on concerns of rising Covid-19 cases in China and RBI’s hawkish commentary on pausing rate hikes.
• The 30-stock index closed 241 points lower at 60,826 while the 50-stock index Nifty50 ended down 71 points to close at 18,127.
• All sectoral indices except IT closed in the red, with PSU banks, realty and metal indices amongst the top losers.

Indian benchmark indices Sensex and Nifty50 closed in the red on Thursday, a day after the Reserve Bank of India’s hawkish commentary on pausing interest rate hikes, and concerns of rising Covid cases in China. All sectoral indices, except IT, ended lower with auto, metals and PSU banks losing the most.

The 30-stock index closed 241 points lower at 60,826 while the 50-stock index Nifty50 ended down 71 points to close at 18,127. The Nifty PSU bank index slipped 1.23%, Nifty Metal was down 1.13% while Nifty Realty closed 1.42% lower on Thursday.

Pharmaceutical stocks continued to rally on the Nifty50 index on hopes of rising demand amid resurgence of Covid cases. Sun Pharmaceuticals was the top gainer on the Nifty50 index with 0.95% gains, while Apollo Hospitals rose 0.27%.

"Positive sentiments from the global markets failed to bolster optimism in the domestic indices. The losses were extended in domestic equities owing to the hawkish comments from the RBI's MPC minutes, which suggested that a premature pause in rate tightening would be a 'costly policy error at this juncture'," said Vinod Nair, Head of Research at Geojit Financial Services.

Reserve Bank of India governor Shanktikanta Das’s commentary about a premature pause in monetary policy action being a costly policy error amid inflationary pressure also weighed on the sentiments.

Brent crude oil continued to rise, edging up to $83.6 per barrel after an increase of 1.7%, while rupee appreciated 8 paise to 82.76 against the US dollar.

Insurance company stocks continued to rise after the government’s proposal of a single license to sell all insurance and financial products as the finance ministry proposed amendments ahead of the budget session.

Meanwhile, Asian markets were mixed on Thursday with Shanghai SE Composite Index falling 0.46% while Hang Seng rose 2.71%, Taiwan SE Weighted Index gaining 1.47% and KOSPI up 1.19%.

In the US, the Dow Jones closed 1.60% higher, tech heavy Nasdaq gained 1.54% and S&P 500 was up 1.49% aided by strong quarterly earnings from Nike, FedEx and improving US consumer confidence, which rose to eight month high in December.

Foreign institutional investors (FII) and domestic institutional investors (DII) were net buyers on Thursday infusing ₹928.63 and ₹2,206.59 crore respectively.

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