Sensex, Nifty Retreat From Record Highs As Banks Tumble

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Indian shares slid on Thursday after a sharp rally in banking stocks lost momentum and as widening COVID-19 restrictions in the United States weighed on sentiment globally.

India’s NSE Nifty 50 index and the S&P BSE Sensex hit a record high earlier in the session as investors bet on a faster return to economic growth following upbeat news on a COVID-19 vaccine.

However, the blue-chip benchmark fell sharply in afternoon trading dragged down by heavyweight banking and financial stocks, including HDFC Bank, ICICI Bank, HDFC and Axis Bank, which shed between 2% and 4%.

The Nifty 50 ended 1.29% lower at 12,771.70, snapping a three-day gaining streak, while the S&P BSE Sensex closed 1.31% lower at 43,599.96.

The Nifty bank index, which had climbed nearly 25% this month up to Wednesday, closed 2.85% lower. It had risen in 11 of the last 12 sessions.

A rally in automotive stocks, which had gained for 11 straight sessions amid signs of improving vehicle sales during India’s festive season, also paused and the Nifty auto index fell 0.67%.

Airline SpiceJet, a Boeing customer, jumped 12.2% after the United States lifted a 20-month-old flight ban on the 737 MAX.

Meanwhile, world stocks eased as rising COVID-19 deaths in the United States and fresh restrictions in several states hit sentiment.

Optimism from news this week that Pfizer’s COVID-19 vaccine was 95% effective and its plans to apply for emergency U.S. authorization failed to support markets.

In India’s Delhi, the tally of cases crossed 500,000 on Thursday, although infections elsewhere in the country continued to fall.

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