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India's benchmark stock indices slide 2% as Covid-19 risks heighten

Bank stocks lead the fall; FIIs pull out Rs 3,465 crore

Topics
stock markets | BSE | BSE Sensex

Sundar Sethuraman  |  Mumbai 

stock market, markets, bull, bear, trading, nse, bse, sensex, nifty, rally, coronavirus, covid, lockdown

India’s benchmark indices dropped 2 per cent on Friday, erasing half of the gains made in the previous four trading sessions, as investors reassessed the economic outlook in the light of the rising Covid-19 cases and restrictions imposed by various states.

The Sensex ended the session at 48,782, a loss of 983 points, or 1.98 per cent —the most in three weeks. The Nifty fell 264 points, or 1.77 per cent, to close at 14,631.

Foreign portfolio investors (FPIs) sold shares worth Rs 3,465 crore on Friday, while domestic investors provided buying support to the tune of Rs 1,419 crore.

India on Friday reported 386,452 new Covid-19 cases and 3,498 deaths in the past 24 hours, according to the health ministry data. Many states ran out of vaccines a day before India was to roll out vaccinations for the 18-45 age group. State governments have either extended the lockdown or imposed a fresh set of restrictions to fight the pandemic.

“With so many lockdowns across states, the economy will start slowing down again. From September 2020, we saw constant upgrades for earnings and the economy,” said Jyotivardhan Jaipuria, founder, Valentis Advisors.

“Now for the first time in six months, we see downgrades again. Nobody anticipated such a severe second wave,” said Jaipuria. Banking stocks led the decline with HDFC Bank, HDFC, ICICI Bank, and Kotak Mahindra Bank accounting for two-thirds of the Sensex losses. The lockdown extension could lead to more bad loans. The credit growth was supposed to pick up. But the fresh restrictions will curtail the demand for credit,” said G Chokkalingam, founder, Equinomics.

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First Published: Sat, May 01 2021. 00:53 IST
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