Nifty 50 slips from record-highs as IT sector drops

After a tremendous bull run, the Indian shares fell from the highest that they have ever been since the pandemic hit the world, to end 1.5 per cent lower. As investors continued to book profits on some of the year’s most beneficial pandemic bets like IT sector, this dip has come as a shock to them.

In the early stages of the pandemic, the IT sector was said to be benefitted the most as all the businesses shifted to the digital space owing to the worldwide lockdown. Saurabh Jain, Assistant VP of research, SMC Global Securities, explains that regardless of the dip, the trend of investing in the IT stocks doesn’t seem to be weakening.

While the stock market has witnessed drastic highs and lows during the pandemic, other industries have also been suffering. The corporate sector has suffered enormous losses which they may or may not be able to cover by the end of next year. The loss has been in the form of both capital as well as resources. The main resource of any industry, i.e., employees, has been under the fear of losing their jobs due to the recession in the company profits.

According to a survey, all the sectors have witnessed decline in the employment for over six months in a row. On the contrary, the Composite PMI Output Index, which measures combined services and manufacturing output, rose from 46.0 in August to 54.6 in September, signaling a marked rate of activity growth across the private sector economy.

The Nifty 50 was down 0.25% at 12,825.35 by 0500 GMT, while the S&P BSE Sensex was 0.24% lower at 43,724.48. Both indexes are still up by more than 10% this month on the back of positive COVID-19 vaccine trial results.

As the stock investors continued to show favoritism towards the sectors that were initially expected to recover from the economy, Larsen & Toubro, a construction group, and Mahindra and Mahindra, automaker, were listed among the top enhancers to the Nifty 50. According most economists, India’s economy is expected to recover early next year from recession, but at a moderate pace.

Although the world’s economy is suffering greatly amid the ongoing pandemic, the equilibrium is expected to be achieved soon after the approval of vaccine. This will not only help the stock market make big but also cater to all the businesses that have fallen victim to the economic recession of the world.