Benchmark indices slumped in trade as Covid cases hit a new record of 1,00,000 cases. A partial lockdown in Maharashtra also impacted sentiments.
The Sensex was down nearly 1,300 points in trade, while the Nifty dropped 380 points. The country crossed the milestone of one lakh daily Covid-19 cases for the first time ever since the pandemic struck as the country's tally surged to 1,25,89,067 total infections after a spike of 1,03,558 fresh cases. The state of Maharashtra is currently the worst hit-state with over 30 lakh total infections logged since the beginning of the pandemic. India's factory activity that slowed to a seven month low hit investor sentiments.
Financials led declines on the bourses with State Bank of India dropping almost 5 per cent, while ICICI Bank, Axis Bank and HDFC were among the other losers in trade. A few IT stocks like Wipro and Infosys were among the only gainers.
Most analysts believe that the markets have rallied sharply in the last 6 months and price to earnings multiple for Nifty companies are at historic highs. This makes for some reaction in stocks. All eyes would also be on the Monetary Policy to be announced by the RBI later this week. An accommodative stance may help the markets. It is likely that the country's central bank would maintain a status quo on rates.