Investors lose Rs 8,68,000 crore as rising Covid-19 cases spook D-Street sentiment

Investors wealth tanked by Rs 8.68 lakh crore in Monday’s early trade after the country recorded around 1.7 lakh fresh Covid cases and 900 fatalities in the last 24 hours. With this, the number of active cases across Asia’s third-largest economy breached the 12-lakh mark.

The total market capitalisation of BSE listed companies declined to Rs 200.96 lakh crore against Rs 209.64 lakh crore on Friday. The benchmark BSE Sensex settled 1,707 points, or 3.44%, down at 47,883. On the other hand, the 50-share Nifty index closed 524 points, or 3.53%, lower at 14,310.

Gaurav Garg, Head of Research, CapitalVia Global Research, said, “The market opened with a gap down due to concerns about rising Covid-19 cases in the country and fears of lockdown in some states weighed on sentiment throughout most of the sector.”

As many as 29 stocks in the Sensex index traded in the red with IndusInd Bank falling the most 8.60%. It was followed by Bajaj Finance (down 7.39%), SBI (down 6.87%), ONGC (down 5.54%), Titan (down 5.24%) and M&M (down 5.05%). On the other hand, Dr Reddy’s Labs (up 4.83%) emerged as the sole gainer in the index.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, “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% GDP growth and above 30% earnings growth. The situation may improve if cases peak soon and start coming down. But presently, this is negative.”

He further said that the bad health situation and rupee depreciation have improved prospects for the pharma and IT sectors, which are likely to remain resilient even during a market downturn. The economy-facing stocks are likely to be under pressure.

Among the sectoral indices on BSE, the Realty index was down 7.70%. Industrials, Metal, Basic Materials, Auto, Power and Finance also declined by over 5%. Other indices were also in the red.