Sensex fell nearly 900 points in early trade today and Nifty slipped 254 points despite firm global cues. The 30-stock index touched intra day low of 49,899 against previous close of 50,792, declining 893 points today. Nifty lost 254 points to 14,776 against previous close of 15,030.
The crash in benchmark indices came amid mixed Asian markets. The Shanghai Composite index fell 0.6% to 3,432.01. Tokyo's Nikkei 225 index edged less than 0.1% higher, to 29,732.98, and the Hang Seng in Hong Kong climbed 0.6% to 28,907.15. In South Korea, Kospi lost 0.2% to 3,049.16. Sydney's S&P/ASX 200 inched 0.1% higher, to 6,771.00.
Here's a look at factors, which led to the correction in market today.
Jump in COVID-19 cases: India reported this year's biggest daily rise in cases of 26,291 on Monday. Maharashtra has seen the maximum rise in Covid cases. On March 14, the state crossed 16,000-mark as it recorded 16,620 new coronavirus cases. The state government had to impose a weeklong lockdown in Nagpur from March 15 to contain rising Covid cases. Rising coronavirus cases in several parts of the state has hit investor sentiment.
Rising inflation: Wholesale inflation rose to 27-month high as commodity prices increased. The wholesale price index-based inflation stood at 4.17 per cent in February 2021 as against 2.03 per cent a month ago.
Retail inflation too rose to three-month high in February after cooling off for two months. Consumer price inflation rose to 5.03 per cent as food and fuel prices rose , showed data released by Ministry of Statistics and Programme Implementation. Retail inflation in January stood at 4.06 per cent.
Rising bond yields in US: The yield on the benchmark 10-year US bond yields jumped to 1.63% from 1.52% a day earlier. The rise in yields came after a $1.9 trillion recovery package was signed into law last week. A rise in bond yields leads to waning investor interest in equity shares since the former involves lesser degree of uncertainty and offers decent returns.
Fall in industrial production: India's industrial output, measured by the Index of Industrial Production (IIP), contracted 1.6 per cent year-on-year in January, In January 2020, industrial production had grown 2.2 per cent. Mining and manufacturing output declined 3.7 per cent and 2 per cent, respectively, in January 2021.