The Indian Sensex fell over 700 points to 33,538 – its biggest loss in three weeks – while Nifty fell over 2% to 9,902. The Fed predicted the US economy would shrink 6.5% in 2020 and unemployment would still be at 9.3% at year’s end, denting optimism of a quick economic recovery that had pushed global equities to highest level since February.
Market sentiment also took a hit as new coronavirus infections continued to rise in India with cases now near 2.9 lakh.
“The statement from the US Fed that recovery from pandemic would take longer than expected triggered a weak start which worsened with a deep cut in the European indices in the latter half,” said Ajit Mishra, VP – Research, Religare Broking Ltd.
Indian markets also extended their losses after Supreme Court asked telecom operators to file replies on a roadmap for payment of government dues.
The Nifty banking index fell 2.72% following the hearing as many banks have large exposure to the telecom sector.
HDFC Bank, ICICI Bank and Kotak Mahindra Bank were the top drags, falling between 2.3% and 3.3%. The country’s top lender State Bank of India ended down 5.62%.
Shares of telecom operators Bharti Airtel fell 2.7%, while Vodafone Idea tumbled 14.75%
US Markets
Wall Street plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence and digested dour economic forecasts from the U.S. Federal Reserve.
The Dow Jones Industrial Average fell 1,861.82 points, or 6.9%, to 25,128.17, the S&P 500 lost 188.04 points, or 5.89%, to 3,002.1 and the Nasdaq Composite dropped 527.62 points, or 5.27%, to 9,492.73.
Asian Markets
Asian equities are set to fall sharply on Friday after Wall Street stocks and oil tumbled over growing concerns that a resurgence of coronavirus infections could stunt the pace of reopening economies.
Australian S&P/ASX 200 futures were down 3.04% at 20:59 GMT, while Japan’s Nikkei 225 index closed down 2.82% at 22,472.91 on Thursday. Hong Kong’s Hang Seng index futures were down 2.06%.