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Market fails to hold initial gains amid Covid, lockdowns

Sensex, Nifty extend losses in choppy trade; banking, IT stocks drag

Short covering likely above 52,400 level

Short covering likely above 52,400 level

Mumbai: Domestic equity benchmarks Sensex and Nifty erased early gains to finish with losses for the second day on the trot on Tuesday, as surging Covid-19 cases and growing localised restrictions continued to dent investor sentiment. The BSE Sensex slipped 243.62 points or 0.51 per cent to close the session at 47,705.80, an over two-month low. Intra-day, the BSE gauge rose as much as 529 points to touch the day's peak of 48,478.34. Likewise, the NSE Nifty climbed over 167 points to reclaim the key 14,500-level during the day, but surrendered all its gains to end at 14,296.40, showing a drop of 63.05 points or 0.44 per cent. On the Sensex chart, UltraTech Cement, HCL Tech, HDFC, Tech Mahindra, HDFC Bank and HUL emerged as the major laggards - falling as much as 4.70 per cent. On the other hand, Bajaj Finserv, Dr Reddy's, Bajaj Finance, Bajaj Auto, M&M and Maruti were among the top gainers, climbing up to 3.70 per cent.

Market analysts said a continued spike in fresh Covid-19 cases in the country and announcements of restrictions by several states have clearly dented investor sentiments and posed a threat to earnings recovery.

"Indian markets witnessed a bounce-back in its opening trade, however, failed to hold on to its early gains due to weak global cues and the possibility of a stricter lockdown in Maharashtra."

Despite the vaccine drive kindling hopes of recovery, the trend in the market will depend on positive developments like decreasing Covid cases and lifting restrictions. IT and FMCG were the sectoral laggards while mid and small-caps outperformed," said Vinod Nair, Head of Research at Geojit Financial Services.

Sectorally, BSE IT index fell over one per cent, followed by tech with 0.77 per cent drop. Other major losers were basic materials, FMCG, finance and banking. However, healthcare, capital goods, telecom and industrials closed in the green.

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