Stock market: Why the Sensex crashed?

While the Sensex lost 1,707 points or 3.44 per cent to close at 47,883, the Nifty 480 points or 3.24 per cent to close at 14,354. Besides the sudden spike in Covid-19 infections, subdued trend in the Asian markets also weighed on the Indian indices.

Mumbai: Equity benchmark indices BSE Sensex and NSE Nifty suffered huge losses on Monday amid rising number of Covid-19 cases.

While the 30-share Sensex lost 1,707 points or 3.44 per cent to close at 47,883, the much broader Nifty lost 480 points or 3.24 per cent to close at 14,354.

IndusInd Bank was the top loser in the Sensex pack, tanking over 8 per cent, followed by Bajaj Finance, SBI, ONGC, Titan, M&M, Bajaj Finserv, ICICI Bank and Axis Bank. Dr Reddy's was the sole gainer, climbing over 4 per cent.

Dr Reddy's Laboratories was the only stock in the Sensex pack that ended in the green.

"Domestic equities reminded the bloodbath of March 2020 as record rise in COVID-19 cases in the country and possibility of lockdowns in several states dented investors' sentiments," said Binod Modi, Head - Strategy at Reliance Securities.

Concerns of possible reversal in economic momentum and earnings recovery made investors risk-averse and huge selloff led to the erosion of nearly Rs 9 lakh crore in investor wealth, he added.

Echoing his views, Satish Kantheti, Joint Managing Director, Zen Money, said: “The fear of a complete lockdown in key states like Maharashtra spooked the investors.”

“Lockdowns will affect the corporate performance which in turn the stock prices,” he added.

Briefing media after a virtual meeting headed by Maharashtra CM Uddhav Thackrey on the prevailing Covid-19 situation, state health minister Rajesh Tope said that an appropriate decision regarding imposing a lockdown would be taken after April 14.

On Sunday, Maharashtra reported over 63,000 new Covid-19 infections which its highest ever single-day surge since the pandemic.

Overall, India reported 1,68,912 new Covid-19 cases in the last 24 hours, as per health ministry data.

With this, India has once again taken its spot as the second-worst hit nation in terms of infections after the US.

Along with the surging Covid-19 cases, the subdued trend in the Asian markets also weighed on the Indian indices.

Elsewhere in Asia, bourses in Shanghai, Hong Kong and Tokyo were in the red, while Seoul ended with mild gains.

Stock exchanges in Europe were largely trading on a positive note in mid-session deals.

Meanwhile, international oil benchmark Brent crude was trading 0.57 per cent higher at USD 63.31 per barrel.

(With PTI Inputs)