Profit booking amid weak global cues played spoilsport as the Sensex fell 746 points after touching 50000 on Thursday even as the Nifty fell below the 14400 mark.
Market experts are guiding for more volatile days in the days ahead, though they admit that in the long-run, the bull run remains intact.
The Sensex had on Thursday hit the 50000 mark for the first time aided by strong portfolio inflows and on positive vibes from Joe Biden taking charge as the US President. However, the persistent run-up in stock values had set the stage for moderation.
On Friday, global developments were also not conducive for sustaining the benchmark index’s run above the 50000 mark. There was disappointing data from the Eurozone, news from China of more infections amid apprehensions of more lockdowns elsewhere.
“Virus worries were front and centre with Asian stocks falling, as a spike in Chinese infections sparked testing of millions in Beijing,” said Deepak Jasani, head of retail research, HDFC Securities.
“European stocks dropped on rising Covid-19 cases and lockdown worries globally. Optimism surrounding a leadership change at the White House ran out of steam. Data also showed the flash Eurozone purchasing managers index dropping in January to a two-month low of 47.5, coming close to the expected 47.6 — from 49.1 in December.
“UK retail sales only grew 0.3 per cent in December, weaker than expected, marking a weak end to their worst year on record,’’ he said.
Back home, analysts say that good results from companies are now largely factored into the prices and the key event to watch out for is the Union budget and that stocks will be volatile ahead of February 1.
In Friday’s trade, the Sensex could not sustain at higher levels as investors sold the RIL stock ahead of its third quarter results, while banking and finance counters also witnessed heavy selling. After opening marginally lower at 49594.95, the 30-share Sensex hit an intra-day low of 48832.08 and finished at 48878.54 — a fall of 746.22 points or 1.50 per cent over its last close.