The rise in COVID-19 cases and the possibility of a lockdown in Maharashtra to curb the spread of the virus created a panic in the Bombay Stock Exchange (BSE) on Monday, the first day of trading after the weekend. The market closed in the red with the Sensex plunging 882.61 pts to end at 47,949.42. The Nifty tanked 258.40 pts to 14,359.45.
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.
“The panic created in the stock market was due to the obvious reason of uncertainty due to COVID and lockdown announcements. However, this is the time when investors must analyse the dream companies and invest at the right time from a medium to long-term perspective. While the market is expected to remain volatile in the near future, the investors have an opportunity to enter at the right price“, said Abhishek A Rastogi, partner at Khaitan & Co.
Around 1.45 p.m., the Sensex traded at 47,858.33, lower by 973.70 points or 1.99 percent from its previous close. The Nifty50 on the National Stock Exchange traded at 14,330.40, down 287.45 points or 1.97 percent from its previous close.
The Sensex crashed over 1,300 points in early trade on Monday, tracking massive across-the-board selloff as mounting COVID-19 cases spooked investor sentiment. The 30-share BSE index was trading 1,318.21 points or 2.70 percent lower at 47,513.82. Similarly, the broader NSE Nifty tanked 394.90 points or 2.70 percent to 14,222.95. All Sensex components were in the red. Bajaj Auto was the top loser in the Sensex pack, dropping over 5 percent, followed by IndusInd Bank, SBI, ICICI Bank, Bajaj Finance and Axis Bank.
With the news of an impending lockdown in Maharashtra which will impact production, services, the uncertainty in the current situation will continue for the next two month at least, said Ajay Kejriwal. “This is the main reason for vloalitily and downfall. It will continue for a week. The market will not recover unless there is business certainty,” Kejriwal said,
"Market opened with a huge gap down despite positivity in the other Asian markets," said Gaurav Garg, Head of Research at CapitalVia Global Research. "Traders got worried, as the Shopping Centre Association of India (SCAI) said businesses have been severely impacted, with the revenue falling by almost 50 percent due to localised lockdowns to prevent the spread of COVID-19 in the country."
Investors' wealth in morning trade on Monday tumbled over Rs 3.70 lakh crore as markets went into a tailspin amid record surge in coronavirus cases in India. The 30-share BSE benchmark index tanked 1,469.32 points to 47,362.71 in early trade.
Following the massive selloff, the market capitalisation of BSE-listed companies declined by Rs 3,70,729.4 crore to Rs 2,01,60,016.60 crore in morning trade. IndusInd Bank, Axis Bank, Bajaj Auto, SBI and ICICI Bank were the biggest drags among the BSE 30-share frontline companies' list.
According to Garg, Indian market is expected to trade in a consolidated range between 14,200-14,350. "14180-14200 will act as a support in the short term. If the market breaks the support range, we can expect the market to correct till the level of 13,600."
Meanwhile, the rupee slumped 52 paise to close at 74.87 (provisional) against the dollar.
Asian markets up
Asian shares rose moderately Monday amid cautious optimism about a global rebound from the coronavirus pandemic. Japan's benchmark closed less than 0.1 per cent higher at 29,685.37, in the first Tokyo market reaction to a weekend by Prime Minister Yoshihide Suga with President Joe Biden over the weekend.
Australia's S&P/ASX 200 inched up less than 0.1 per cent to 7,065.60, while South Korea's Kospi also was little changed, at 3,198.84. Hong Kong's Hang Seng rose 0.5 per cent to 29,106.10. The Shanghai Composite gained 1.5 per cent to 3,477.74.
On Wall Street, the S&P 500 and Dow Jones Industrial Average ended last week at new highs. The S&P 500 rose 0.4 per cent to 4,185.47, led by gains in companies that rely directly on consumer spending, health care stocks and banks, which benefited from higher Treasury yields.
The Dow gained 0.5 per cent to 34,200.67. The S&P and Dow also hit all-time highs on Thursday. The technology-heavy Nasdaq inched up 0.1 per cent, to 14,052.34 after recovering from an early slide. The Russell 2000 index of smaller companies added 0.2 per cent to 2,262.67.
In energy trading, benchmark US crude fell 27 cents to $ 62.92 a barrel in electronic trading on the New York Mercantile Exchange. It lost 32 cents to $ 63.19 on Friday.
Brent crude, the international standard, fell 18 cents to $66.59 a barrel.
In currency trading, the U.S dollar edged down to 108.41 Japanese yen from 108.78 yen late Friday. The euro rose to $ 1.1990 from $ 1.1978.