Domestic stock markets halted an eight-day rally on Thursday, amid selling pressure in banking and financial services shares. The S&P BSE Sensex index fell 343.33 points - or 0.79 per cent - to 43,250.34 at the weakest level of the day, and the broader NSE Nifty 50 benchmark slumped to as low as 12,659.50, down 89.65 points - or 0.70 per cent - from its previous close. Weakness in pharmaceutical shares also dragged the markets lower.
At 12:42 pm, the Sensex traded 179.79 points - or 0.41 per cent - lower at 43,413.88 while the Nifty was down 47.65 points - or 0.37 per cent - at 12,701.50.
Finance Minister Nirmala Sitharaman will address a press conference shortly. The government is planning to announce a fresh round of stimulus totalling about Rs 1.5 lakh crore this week to help pull the economy out of its historic contraction, officials said on Wednesday.
Many economists say the Centre's last stimulus package, in May, largely failed to soften blow of the strict coronavirus lockdown as it focused on providing liquidity and collateral-free credit for small businesses but with little actual spending.
On Wednesday, the government announced production-linked incentives worth about Rs 2 lakh crore spread over five years for manufacturers in 10 sectors.
Meanwhile, other Asian markets approached a more than two-year high on Thursday, buoyed by sustained global stimulus efforts and hopes of a coronavirus vaccine, but some analysts warned of the risk of a correction lower.
MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading 0.44 per cent higher, nearing its highest since January 2018. Chinese shares rose 0.37 per cent while Japanese shares were up 0.62 per cent at a 29-year high.
The gains in Asia came after a mixed performance for US stocks as investors switched back to technology stocks and away from economically sensitive sectors as they weighed COVID-19 vaccine progress and the likely timing of an economic rebound.
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