Investors lost over Rs 8 lakh crore in trade today as Sensex and Nifty came under selling pressure amid record surge in coronavirus cases in India. Market cap of BSE-listed firms fell by Rs 8.78 lakh crore after investor wealth declined to Rs 200.85 lakh crore at the end of today's session. On April 9, market wealth of BSE-listed firms stood at Rs 209.63 lakh crore.
India VIX , the Indian market's volatility gauge, rose 16.17% to 22.99 on Monday, signalling heightened negative sentiment on Sensex and Nifty.
Sensex crashed 1,707 points or 3.44 per cent to end at 47,883 and Nifty plunged 524.05 points or 3.53 per cent to finish at 14,310. This is the second-biggest single day fall for Sensex in 2021 . 2,477 stocks ending lower against 510 rising on BSE. 174 stocks were unchanged in trade today.
India reported 1,69,899 cases of COVID-19 as of 11.30 p.m on April 11, the highest single-day rise in cases since pandemic hit India last year . As many as 904 deaths were also recorded on the day. This is the second straight day the country reported more than 1.5 lakh new cases.
The prospects of a second full-fledged lockdown in Maharashtra wrecked investor sentiment. Maharashtra reported its highest single-day spike in Covid-19 cases with 63,294 fresh cases in 24 hours on Sunday. Almost 10,000 of these were from the state capital Mumbai. There are now 5,65,500 active cases in Maharashtra. Amid the Covid surge, the Maharashtra government is yet to take a final decision on whether the state will go into a complete lockdown to control the spread of the virus.
"Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy and the markets. Since the situation is the worst in economically significant Maharashtra, this can impact the market's assumption of around 11 per cent GDP growth and above 30 per cent earnings growth," says Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
From an investment viewpoint, he believes that pharma and IT sectors are likely to remain resilient even during a market downturn courtesy the health crisis and rupee depreciation. However, cyclical stocks are likely to be under pressure.