The Indian equity market has witnessed a widespread fall across the sectors as investors remain concerned over the economic fallout from the recent surge in coronavirus cases in the country.
The benchmark BSE Sensex plunged by more than 1,700 points and the Nifty shed 14,300 on Monday, leaving it 3.6 percent lower than the previous day’s closing.
Data suggests that BSE realty stocks fell over 5 percent, while the auto, bank, finance, power, capital goods and consumer discretionary goods & services indices fell up to 4 percent.
Amid an unabated surge in COVID-19 cases, market participants have anticipated strict measures by the state government in the coming days, which will derail the pace of the nascent economic recovery.
“Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy and markets. Since the situation is the worst in economically significant Maharashtra, this can impact the market’s assumption of around 11 percent GDP growth and above 30 percent earnings growth,” V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
Nevertheless, other global markets are also facing pressure due to rising COVID-19 cases. The Nikkei in Japan, Hang Seng in Hong Kong and Shanghai Composite in China fell between 0.5 percent and 1 percent on Monday.
Meanwhile, the Indian rupee has also declined against US dollar, inching above the 75 INR/USD mark on Monday, creating immense pressure on Indian importers as they have to sell more funds for their purchases from global markets.