Rising infections drag indices
The benchmark indices fell along with other global bourses as a rising number of Covid-19 infections weakened investor sentiment and dashed hopes of a sharp economic recovery.
Poor factory output data from China also dampened investor sentiment. The Nifty ended the session at 9,814, falling 1.6 per cent, or 159 points. The Sensex, on the other hand, tumbled 552 points, or 1.6 per cent, to end the session at 33,229.
A jump in the number of Covid-19 cases in China and the US raised concerns about the
NIFTY50 DROPS 1.6% 10,000 9,972.9
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economic impact of the pandemic. On Monday, Chinese authorities announced 49 new cases in Beijing, 36 of which were linked to the Xinfadi seafood supermarket in the city ’s southern Fengtai district.
Analysts said the prospect of a second wave of Covid-19 infections raised the possibility of lockdowns in China, which could hurt global economic revival. Globally, 7.7 million cases have been confirmed, and 430,000 people have succumbed to the disease so far.
“The resurgence of cases in China and other countries deepened pessimism over prospects of a global economic recovery. Stocks were volatile as investors re-evaluate their expectations of economic growth, which many sceptics have been saying were overly optimistic,” said Deepak Jasani, head of retail research, HDFC Securities.
An alleged study by the Indian Council of Medical
Research (ICMR), which suggested that India’s count may keep rising until early October, two-and-a-half months later than it had earlier predicted, left investors jittery. ICMR on Monday disassociated itself from the study. India added 11,220 new cases and 325 deaths on Sunday. At present, India has 153,000 active cases and 9,520 deaths because of the disease.
“Everyone was hoping that cases will peak in August. The projections have spooked investors not just due to the delay in the economic recovery but also because of concerns regarding personal safety,” said Saurabh Mukherjhea, founder of Marcellus Investments.