Indian shares plunge as record Covid-19 surge stokes growth fears

Indian shares tumbled and the rupee weakened on Monday as daily coronavirus infections reached a record high and fresh curbs were imposed in the financial capital of Mumbai, sparking worries about the pace of the country’s economic recovery.

India’s coronavirus caseload jumped by more than 100,000 to surpass 12.5 million on Monday, while the death toll crossed 165,000. Maharashtra state, home to Mumbai, imposed stringent curbs including a complete lockdown on weekends.

The NSE Nifty 50 index dropped 2.27 per cent to 14,530.55 by 0450 GMT, while the S&P BSE Sensex slid 2.37 per cent to 48,843.65.

“The market had run up on the back of the opening up of the economy, and the resultant increase in demand. That entire story is again at risk,” said Siddharth Khemka, head of retail research at Motilal Oswal Securities in Mumbai.

“The concern, from a market perspective, is that the virus is spreading so fast and people will not be able to work, and business and profitability will be impacted.”

Indian bond yields were little changed following the largely-in-line borrowing calendar and as traders await the central bank’s monetary policy decision on Wednesday.

The benchmark 10-year bond yield was at 6.17 per cent, down one basis point from its previous close.

The partially convertible rupee, however, weakened sharply as it tracked a fall in the domestic stock market on worries over surging COVID-19 cases. It was trading at 73.40/41 per dollar versus its previous close of 73.1050.

Private-sector lenders HDFC Bank, HDFC, and ICICI Bank were the biggest drags on the Nifty 50, falling between 3.5 per cent and 4 per cent.

Software services stocks — among the best performers during most of the pandemic in 2020 — were the only stocks that gained. The Nifty IT services index was up 0.37 per cent, with Infosys and Wipro rising 1 per cent each. — Reuters