Fears of the rapid spread of COVID-19 and its possible impact on the economy drove benchmark stock indices down by about 3.5% on Monday. The slump was led by a meltdown in banking and finance stocks.
The S&P BSE Sensex plunged 1,707.94 or 3.44% to 47,883.38. All the 30 shares of the Sensex except for Dr. Reddy’s Laboratories closed in the red. The top three losers included IndusInd Bank (down 8.6%), Bajaj Finance (7.39%) and SBI (6.87%). The NSE Nifty 50 too plunged 524.05 points or 3.53% to 14,310.80. Top gainers were Dr. Reddy’s and Cipla.
Recording its sixth straight session of loss, the rupee plunged to an almost 9-month low, depreciating 32 paise to 75.05 against the U.S. dollar at the interbank foreign exchange, dealers said.
“Rising cases of COVID-19 and fear of probable lockdowns… led to a sell-off in our [stock] markets, which resulted in a huge underperformance compared to global peers,” said Ruchit Jain, senior analyst (Technical and Derivatives), Angel Broking.
“We expect the rupee to weaken versus the USD as have other [emerging market] currencies, and we expect that for the next six months, the Indian economy may progress in fits and starts; the relatively slow progress of vaccination in India means that we will be slower to recover compared to the U.S.”, said R. Venkataraman, MD, IIFL Securities.