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Nifty, Sensex end three days of gains on fears of prolonged slowdown

BENGALURU (Reuters) - Indian shares snapped three sessions of gains on Thursday on worries of a prolonged economic slowdown as the coronavirus pandemic grips rural areas of the country.

Gardeners work outside the National Stock Exchange (NSE) building in Mumbai, India, August 16, 2018. REUTERS/Francis Mascarenhas/Files

India has the third highest coronavirus cases globally and government officials as well as analysts said the flattening of the virus curve is crucial to economic revival.

Domestic coronavirus cases rose, with a record daily jump of 69,652 infections on Thursday morning, taking the total infections to 2.84 million and deaths to 53,866, data from the federal health ministry showed.

Global shares too came under pressure after the U.S. Federal Reserve minutes showed policymakers remained doubtful about a swift rebound in recovery in the world’s largest economy.

The blue-chip NSE Nifty 50 index .NSEI closed down 0.84% at 11,312.20 and the S&P BSE Sensex .BSESN settled 1.02% lower at 38,220.39.

Asian and European markets slipped and the MSCI world equity index .MIWD00000PUS was down 0.6%.

“It is a knee-jerk reaction to news coming out of the United States. Everyone knows the economy is in a bad state but times like this allows for price correction in a market where valuations are high,” said Umesh Mehta, head of research at Samco Securities, Mumbai.

In Mumbai trading, financial stocks lost the most, with the Nifty Financials index .NIFTYFIN and Nifty private bank index .NIFPVTBNK closing down 1.31% each.

Private sector lenders HDFC Bank Ltd HDBK.NS and Axis Bank Ltd AXBK.NS settled over 2% lower and were among the top losers.

Carmaker Tata Motors Ltd TAMO.NS fell 2.64% and was the top loser on the Nifty 50 index.

Bucking the trend, state-run firms advanced with the Nifty public sector enterprise index .NIFTYPSE rising 2.63%, helped by a 13% jump in hydropower generator NHPC Ltd.

Aarti Drugs Ltd ADRG.NS surged 20% after the firm approved a issue of bonus shares in 3-to-1 ratio.

Reporting by Chandini Monnappa in Bengaluru; Editing by Arun Koyyur

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