Sensex declines for third day over 2nd wave worries

THE SENSEX ERASED GAINS OF AS MUCH AS 0.6% TO END 1% DOWN AT 48,253.51, ITS LOWEST LEVEL SINCE APRIL 23

Stocks extended losses as investors worried that about the prospects of a national lockdown as coronavirus cases continued to rise, with the country’s most popular sporting event deferred following an outbreak among players.

The S&P BSE Sensex erased gains of as much as 0.6% to end 1% down at 48,253.51 in Mumbai, its lowest level since April 23. The NSE Nifty 50 Index closed 0.9% lower.

Sixteen out of the 19 sector sub-indexes compiled by BSE Ltd. dropped. A gauge of healthcare shares fell the most since March 18, led by declines in Cipla Ltd, Sun Pharmaceutical Industries Ltd and Dr Reddy’s Laboratories Ltd.

India’s daily count of deaths has risen above 3,000, while the number of cases has been over 3,00,000 in recent days. This has forced many states including most populous state of Uttar Pradesh to impose restrictions on movement, though the rules are not as strict as the nationwide lockdown a year ago.

“There is pressure on market as uncertainty related Covid continues to rise,” said Hemang

Kapasi, a fund manager at Sanctum Wealth Management.

He expects markets to continue to be volatile until clarity emerges on pace of vaccination in the country. India has so far administered 15.9 crore Covid-19 vaccine doses, although inoculation centres have witnessed a supply shortfall recently.

Prime Minister Narendra Modi has so far resisted any proposal for nationwide restrictions, though pressure is growing.

“Domestic equities look to be flat at the moment,” Binod Modi, head of strategy at Reliance Securities, said. While the sharp increase in daily coronavirus cases in several states is a matter of concern, many parts like Maharashtra and Delhi are starting to see a modest decline in new cases, which offers comfort, Modi said.