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Sensex Falls 338 Pts, Nifty Slips Below 15000
Tata Steel, Jindal Steel, and SAIL declined over five per cent each as the Metal sector underperformed throughout the day.
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Dalal-Street failed to hold the morning cues and turned red on sustained selling pressure across all major sectors with the metal stocks declining the most as bears grabbed control. Further, stressed movements in the Asian markets and U.S markets also weighed the sentiment in the Indian equities, said experts.
The BSE Sensex closed at 49,564.86, down by 337.78 points, while the Nifty-50 plunged 124.10 points to close at 14,906.05. The 30-share pack witnessed buying in eight shares and 22 shares closed with losses on Thursday, May 20. ONGC, Sun Pharma, and Power Grid Corp were the top laggards for Sensex, down over two per cent each.
The metal sector was the worst hit among all others sectors as the index shed more than four per cent in the day's trade. Shares of Tata Steel, SAIL, and Jindal Steel declined over five per cent in the trading session on Thursday. Experts are of a view that the index and stocks will witness some profit booking further as the sector has moved 3x since last year.
"S&P BSE Metal index has seen some profit booking as the metal index has become 3x in the last 1 year, we have seen a one-sided rally in the metal index from lows of 6145 in May 2020 to highs of 20429 in May 2021. We may see some health corrections of 10-15 percent from highs in the metal index as well as in stocks"
However, shares of M&M, Cipla, and BPCL ended among the top gainers of the index advancing over two per cent each.
Adding to the volatility, some reports from private research firms suggested that the government's plan of divestment is likely to slow down amid the Covid-19 scenario in the country which has also created a negative impact on the traders today, said experts.
"Traders were also worried as private reports stated that the government's strategic divestment plans for the fiscal year 2021-22 have slowed down due to the second wave of COVID-19. During the Budget presented in February, the government set an ambitious disinvestment target of Rs 1.75 lakh crore for FY22," said Narendra Solanki - Head of Fundamental Research at Anand Rathi Shares & Stock Brokers.
In the overall market breadth, 1614 shares advanced, 1397 shares declined, and 161 shares unchanged.
U.S markets closed weak post the outcome of the Federal Reserve meeting wherein the participants agreed that the U.S economy remained far from the central bank's target. The Asian markets were also trading mainly in the red territory following their global peers. The Singaporean Exchange was trading with a decline of 100 points at the time of filing.