Sensex, Nifty Crash After Hitting Record Highs Amid Covid Concerns & Profit Booking

Mumbai: In a dramatic shift on Wednesday, both the S&P BSE Sensex and NSE Nifty 50 experienced a significant downturn, resulting in a bloodbath on Dalal Street. The S&P BSE Sensex dropped 930.88 points (1.30%) to 70,506.31, while the NSE Nifty 50 closed 302.95 points lower (1.41%) at 21,150.15. This marked the Nifty 50’s worst session in nine months.

The day began with record highs for both indices, driven by strong gains in IT and consumer goods stocks. However, a sharp reversal occurred, leading to a negative close for the market due to a notable downturn across heavyweight sectoral indices.

Several factors may have contributed to the sudden downturn, including the resurgence of Covid-19 cases in India, the US, the UK and other parts of Asia. Traders also pointed to heavy profit booking by investors seeking to capitalize on the previous strong market performance.

Parth Nyati, founder of Tradingo, noted that the market’s euphoria turned into a significant decline, with the Nifty dropping 500 points from its peak to finish over 300 points lower. While the exact cause of the reversal remains unclear, factors such as easy money sentiment, tight liquidity among HNIs involved in IPOs, and the recent rise in Covid cases may have played a role.