NEW DELHI: Owing to the sharp spread of fresh covid-19 cases in China and looming fears of a global recession, India’s equity market took a beating on Wednesday with the BSE benchmark Sensex falling 1,068 points from the day’s high to a low of 60,938.
In the highly volatile session, the 30-share index closed the session at 61,067.24, down 635.05 points from the previous day's closing. The Sensex is now down about 2500 points from its 52-week high of 63,583, scaled on December 1, 2022. The broader NSE Nifty50 declined 186.20 points or 1.01% to end at 18,199.10.
“Indian markets underperformed their Asian peers and came down crumbling on broad-based sell-off, mainly over concerns that recessionary fears in key major economies will have a spill-over effect on the local growth prospects going ahead. Investors are also worried that mounting Covid cases in China may lead to further deterioration in global economic health prompting traders to cut their equity market exposure,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
The detection of three cases of Omicron subvariant BF.7, the strain driving China’s current surge of Covid cases, in India is also said to have spooked investors and added to the volatility. Siddhartha Khemka, Head - Of retail Research, at Motilal Oswal Financial Services, said that Covid-sensitive sectors such as pharma and diagnostics are in limelight and are expected to remain in momentum.
“On the other hand, sectors like travel and tourism, hotels, airlines, entertainment and retail sectors may witness some pressure. Given the concern over the resurgence of the pandemic once again along with recessionary fear, we expect the market volatility to continue,” added Khemka.