The deserted Bombay Stock Exchange building is pictured as the Sensex went down after a lockdown in the wake of the start of the novel coronavirus pandemic, in Mumbai on March 23, 2020. Photo: The Times Of India

The rapid rise in Covid-19 cases in India as part of the second wave has now cast a shadow on the country’s stock markets.

On Monday, the benchmark S&P Bombay Stock Exchange Sensex and the Nifty50 indices suffered huge reverses as bears launched an all-out attack amid a record surge in coronavirus cases and fears of lockdowns. Investors lost nearly nine trillion rupees during the day as the Bombay Stock Exchange market capitalization was down to 200 trillion rupees from 209 trillion on Friday’s close.

Both Sensex and Nifty indices cracked nearly 1,900 points and 590 points to hit intra-day lows of 47,693 and 14,249 levels, respectively. At close, Sensex was down 1,708 points at 47,883, while Nifty50 ended 524 points down at 14,311.

Barring pharma stocks, all Nifty sectoral indices have nosedived into negative territory and banking stocks were the worst hit. Index heavyweights such as Reliance Industries, HDFC Bank, HDFC, ICICI Bank, SBI, Bajaj Finance, TCS, Infosys, and L&T declined up to 8.5%.

Pharma stocks up

There was brisk-buying in pharma stocks led by Dr Reddy’s Labs and others such as Cipla and Cadila Health. Dr Reddy’s scrip surged as much as 7.57% to an intra-day high of 5,119.90 rupees apiece on the Bombay Stock Exchange and ended the day at 4,989.20 rupees, up 4.83% from previous close.

The Hyderabad-based pharma multinational has gotten emergency approval of Sputnik V vaccine in India. In September last year, Dr Reddy’s had partnered with the Russian Direct Investment Fund to conduct clinical trials of Sputnik V and for its distribution rights in India. The vaccine will be imported from Russia and will be subject to price controls.

India has reported 1,68,912 fresh Covid-19 cases in the last 24 hours — the biggest spike in daily cases witnessed since the pandemic began last year. Economists are worried this will put the nascent recovery after the first wave in jeopardy. The rising cases have taken a toll on Nifty sectoral indices including banks, automobile, FMCG, financial services and real estate.

FPI outflow

As another indicator of weakening investor sentiment, foreign portfolio investors have pulled 9.41 billion rupees out of India in April. They are the most influential investor group and in the calendar year 2021 they had pumped 557 billion rupees into the Indian markets. Experts attribute this pullout to Covid-19 and the weakness of rupee.