Why did the Sensex correct by 1100 points on Thursday?

It was a day on which the Sensex and the Nifty cracked vertically. The Sensex was down for the sixth straight session and has lost nearly 2800 points in the last 6 sessions. In the current week itself, the Sensex lost close to 2400 points.

If you look at the index, then other than Hindustan Unilever, all the other stocks were in the negative. The Sensex has already lost close to 8% in a span of just six days as most markets including the US and Europe have taken a big hit in the last few days.

The overall market capitalisation of the Bombay Stock Exchange dropped to Rs.149 trillion losing close to Rs.3.73 trillion in juts on session on Thursday. While the profit booking ahead of expiry took its toll, there were a couple of other reasons too.

The combination of rising COVID cases and the recent investigation into the slush money trail of banks has taken a big hit. At the same time, the strength in the dollar has also taken its toll on Indian markets. In the meanwhile, Indian macros have been going from bad to worse in the last few weeks.

The top loser on the index was IndusInd Bank followed by Bajaj Finance, Tech Mahindra, TCS, M&M and Tata Steel. Of 30 Sensex shares, 29 closed in the red on Thursday. Even the technology giants and the pharma companies were not spared.