The S-P BSE Sensex and NSE Nifty 50 indexes fell sharply on Wednesday as rising Covid-19 cases dampened investor sentiment.
The benchmarks opened lower and extended losses in the last hour of trade after the government said it has detected a new "double mutant variant" of the novel coronavirus.
The rising cases have raised concerns of renewed lockdowns in the parts of the country and impact on economic recovery, analysts said.
The Sensex fell as much as 931 points at the day's lowest level and Nifty 50 index tumbled below its important psychological level of 14,550.The Sensex ended 871 points or 1.74 per cent lower at 49,180 and Nifty 50 index dropped 265 points to close at 14,549.Government detected a new "double mutant variant" of the novel coronavirus, the health ministry said on Wednesday, adding to concern as the government struggles with the highest single-day tally of new infections and deaths this year.Genome sequencing and analysis of samples from Maharashtra state found mutations in the virus that do not match previously catalogued "variants of concern" (VOC), the ministry said in a statement.Meanwhile, the country reported 47,262 new infections over the previous 24-hour period, the highest since early November, taking its overall tally to 11.7 million.
Only the United States and Brazil have higher caseloads."The economic activity comes down with surge in (virus) cases," Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services told news agency Reuters."The global market cues are not very positive.
COVID-19 cases are going up globally and that is a major concern.
Until you see some cool off sustainably in commodity prices and bond yields, equity markets are unlikely to go up in a hurry."Reliance Industries, ICICI Bank, HDFC Bank, HDFC, Infosys, ITC and Axis Bank were among the top drags on the Sensex.
The collectively wiped out over 400 points from the 30-share index.Selling pressure was broad-based with banking, metal, auto, financial services, IT, FMCG, PSU bank and realty indices closing with losses between 1.5-3 per cent.Mid- and small-cap shares were also facing selling pressure as Nifty Midcap 100 and Nifty Smallcap 100 indexes dropped 2 per cent each while the gauge of expected volatility on the NSE - India VIX index spiked over 8.5 per cent.The overall market breadth was extremely bearish as 2,125 shares ended lower while 832 closed higher on the BSE.In the Nifty 50 basket of shares, only three shares managed to close higher.