Indian markets fell sharply after a weak opening on Monday as the Covid-19 economic revival package announced by the government left investors unimpressed.

At around 9:30 am, BSE Sensex was down almost 200 points while NSE Nifty was trading below 9,100 points. By 9:45 am, Sensex was down 800 points while Nifty was trading lower by over 2 per cent.

Banking and financial stocks have taken the worst hit in morning trade. Some of the top laggards in morning trade were as Coal India, ICICI Bank, Bajaj Finance, Axis Bank, SBI, Tata Motors and IndusInd Bank.

It shows that banks are not happy with the relief package announced by the government, as they have been asked to provide more loans to stressed MSMEs. Nifty Bank was down over 2 per cent while Nifty Financial Services was quickly heading towards cross two per cent.

A slight increase in the volatility index was also observed in early trade hours. Meanwhile, shares of Cipla, Infratel, Infosys, Tech Mahindra, TCS, Reliance, Sun Pharma were adding to the gains.

According to analysts, markets were expecting a generous direct liquidity infusion as immediate support for small businesses and MSMEs, but most of the liquidity was infused through indirect credit guarantees, which may put banks under severe pressure.

Among other things that have made investors nervous is the extension of lockdown till May 31. Sectors like aviation, hospitality and more continue to remain shut, indicating that the economic impact of the virus could stay much longer.

Another factor adding to negative sentiments in domestic markets is the record increase in cases. India recorded in excess of 5,200 Covid-19 positive cases in the last 24 hours.

Globally, however, stocks edged up as more countries decide to reopen businesses after the prolonged lockdown. While uncertainty remains at large, the fact the businesses have resumed after the lockdown has given fresh hope to global investors.