Covid Scare Drags Sensex Down 300 Points

The Indian markets took a sharp U-turn in the early hours of trade this morning. After opening over 200 points higher, the S&P BSE Sensex hovered around 48,230 levels, down 300 points, and the Nifty50 index gave up the 14,450-mark.

The slide in the markets was triggered by a worsening Covid-19 scenario. The country added a record over 2 lakh new cases of infection in a day, pushing the tally to 1,40,74,564, while the active cases surpassed the 14-lakh mark, according to the Union Health Ministry. A total of 2,00,739 new Covid-19 cases have been registered in a span of 24 hours. The death toll increased to 1,73,123 with 1,038 daily new fatalities, the highest s last year.

Besides the Covid crisis, the market downturn this morning was fuelled by Infosys. The share fell 5 per cent after the announcement of its March quarter results. The IT major was followed by Mahindra & Mahindra, and IndusInd Bank with a 3 per cent slide for both. On the other hand, ONGC was the top gainer with a 3 per cent rise, followed by NTPC, State Bank of India, and UltraTech Cement. All three recorded 1 per cent increase.

The markets were closed on Wednesday. The index closed Tuesday’s trading up 660.68 points at 48,544.06, and Nifty surged 194 points to 14,504.80. Foreign institutional investors were net sellers in the capital market, selling shares worth Rs 730.81 crore on Tuesday.

“Amid the negative of an alarming rise in Covid-19 cases, a relief from the market perspective is that there is no large-scale lockdown,” says VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Massive restriction in activity in Maharashtra is bound to have its impact on growth and earnings. “The market knows this, but what is unknown is how long will this last and how quickly we can get ahead of the infection cases,” he says.

In the currency market, the rupee slumped 17 paise to 75.22 against the US dollar in the opening trade on Thursday, following losses in domestic equity markets amid concerns over rising Covid-19 cases. Foreign funds outflow also weighed on investors' sentiment, forex traders believe.

At the interbank foreign exchange, the domestic unit opened sharply lower at 75.19 against the dollar, and lost further ground to quote at 75.22, a fall of 17 paise over its previous close. In early deals, it touched a low of 75.23.

Bourses in Shanghai, Hong Kong and Tokyo were in the red in mid-session deals, while Seoul was trading on a positive note. Equities on Wall Street too ended on a negative note in overnight trade after Federal Reserve’s Beige Book survey on economic activity pointed to a moderate pace of pick-up in economic activities to start the year with a slight uptick in inflation.

International oil benchmark Brent crude was trading flat at $66.58 per barrel.