Amid profit booking, valuation concerns, market end deep in red (2nd Ld)
New Delhi, Jan 15 (IANS) The Indian stock market, which has off late been on a bull run, plunged on Friday as traders took to profit booking amid concerns of high valuations.
The BSE Sensex, which seemed well on course to reach the 50,000 mark, fell over 500 points during the day.
Sensex closed at 49,034.67, lower by 549.49 points, or 1.11 per cent, from its previous close of 49,584.16. It had opened at 49,656.71 and recorded an intra-day high of 49,656.71 and a low of 48,795.79 points.
The Nifty50 on the National Stock Exchange closed at 14,433.70, lower by 161.90 points, or 1.11 per cent, from its previous close.
S. Ranganathan, Head of Research at LKP Securities, said: “Markets began circumspectly amidst weak job data in the US even as (US President-elect) Joe Biden unveiled details of the $1.9 trillion rescue package. Friday’s afternoon trade saw profit taking in IT stocks despite the biggies putting out positive commentary with large deal wins as MCAP to GDP crossed 100 per cent leading to volatility.”
Deepak Jasani, Head of Retail Research at HDFC Securities, noted that the markets fell due to profit booking amid weak global cues.
Volumes on the NSE were higher than the previous session. Among sectors, all of them ended in the red with IT, PSU banks and pharma falling the most, he said, adding that advance decline ratio was severely negative.
Asian shares tripped lower in afternoon trade on Friday, reversing earlier gains as rising Covid-19 cases in China reinforced investor concerns over the prospects for a global economic recovery. European stock markets traded lower Friday, with investors weighing increased Covid-related restrictions with the announcement of additional US stimulus.
Further, the selloff comes amid rising concerns of high valuations in the financial markets at a time when economies are yet to recover from the pandemic-induced slowdown,which may also have impacted the investor sentiments, analysts said.