InvestorQ : What triggered the sharp correction in the Nifty and the Sensex on Monday 21 December 2020?
ishika Banerjee made post

What triggered the sharp correction in the Nifty and the Sensex on Monday 21 December 2020?

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3 months ago
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It looked like a virtual carnage on Dalal Street on Monday 21-Dec as the Sensex dropped by as much as 2037 points at one point of time before closing 1,407 points lower. Even the Nifty displayed a similar trend during the day as it fell close to 13,100 before recovering towards the close. The Nifty also lost more than 400 points during the day.

On Monday alone, nearly Rs.659,000 crore of market capitalization was wiped out in as the correction was most intense in the heavyweights. Panic profit booking was visible as there was a global rout in Asian and European stocks. The correction was most pronounced in stocks like Tata Motors and IndusInd Bank that have strong UK connections.

Nifty actually touched an intraday low of 13,131 on Monday but recovered sharply to close above the 13,300 levels. The hit was evident if you look at the fact that all the 30 Sensex stocks were down with ONGC losing 9%, IndusInd Bank 7.1%, M&M 7% and SBI 6%. Most of the indices, other than pharma index, were deep in the red on Monday.

With fresh travel curbs imposed on UK, aviation stocks tanked 10%. PSU Banks index fell 7% as stocks were battered across Europe. In response, major cities in India also imposed in-bound travel curbs and also night curfew in some places to prevent recurrence of the pandemic. The latest strain appears to be more virulent.

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