COVID impact: Sensex nosedives over 1,300 points, Nifty below 14,300
The Sensex crashed over 1,300 points in early trade on Monday (April 19), tracking massive across-the-board selloff as mounting COVID-19 cases spooked investor sentiment.
The 30-share BSE index fell to 1,318.21 points, or 2.70 per cent lower, at 47,513.82, before recovering, trading 1.8% per cent around 2pm. Similarly, the broader NSE Nifty tanked 394.90 points, or 2.70 per cent to 14,222.95, before recovering and trading at 14371.80, down 1.73%.
All Sensex components were in the red. Bajaj Auto was the top loser in the Sensex pack, dropping over 5 per cent, followed by IndusInd Bank, SBI, ICICI Bank, Bajaj Finance and Axis Bank. In the previous session, Sensex ended 28.35 points or 0.06 per cent higher at 48,832.03, and Nifty rose 36.40 points or 0.25 per cent to 14,617.85. Foreign institutional investors were net buyers in the capital market as they purchased shares worth ₹437.51 crore on Friday, according to provisional exchange data.
“The health crisis India is going through and localised lockdowns and restrictions on economic activity warrant a market correction,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services told PTI.
Related news: PM holds meeting as India logs 2,73,810 daily COVID-19 cases
The targets of around 11 per cent GDP growth and above 30 per cent earnings growth for FY 22, that the market had assumed pre-second wave are likely to fall short, he added. “The steady rise in COVID-19 positive cases and the steady decline in recovery rates are areas of serious concern,” he noted.
“But, this negativity need not reflect fully in the market since the global clues are positive. The sharp recovery in global growth led by the US and China augur well for markets globally.” Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading on a positive note in mid-session deals. Meanwhile, international oil benchmark Brent crude was trading 0.49 per cent lower at USD 66.44 per barrel.
The exponential rise in India’s COVID caseload has also caused the Indian rupee to fall to 52 paise to 74.87 against the US dollar in opening trade on Monday.
Besides, heavy selloff in domestic equities also weighed in on investor sentiment. At the interbank forex market, the domestic unit opened at 74.80 against the US dollar, then fell further to 74.87, registering a fall of 52 paise over its previous close. On Friday, the rupee had settled at 74.35 against the American currency.
The Indian rupee started on a weaker note against the US dollar after another surge in coronavirus infections over the weekend increased the risk of more broadbased lockdowns, Reliance Securities said in a research note.
Related news: Explainer: Why the rupee is steeply falling against the dollar
India’s total tally of COVID-19 cases crossed 1.50 crore with a record single-day rise of 2,73,810 new coronavirus infections, while the active cases surpassed the 19-lakh mark, according to the Union Health Ministry data updated on Monday.
