Markets falls 0.7% as daily covid cases top 2 lakh for first time

Price-to-earnings (PE) ratio of Sensex and Nifty is at 18.3 and 17.7, respectively, while MSCI Emerging Markets is at 12 and MSCI World is at 16. Photo: APPremium
Price-to-earnings (PE) ratio of Sensex and Nifty is at 18.3 and 17.7, respectively, while MSCI Emerging Markets is at 12 and MSCI World is at 16. Photo: AP
 2 min read . Updated: 15 Apr 2021, 10:56 AM IST Ravindra N. Sonavane

MUMBAI: Indian markets slipped 0.7% on Thursday after the country's daily covid infection cases crossed 2 lakh for the first time in the last 24 hours.

At 10.45 am, the benchmark Sensex fell 0.72% or 349 points to 48,194 points while Nifty dropped 0.7% to 14,411.90 points.

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India added more than 2 lakh covid infection cases on Wednesday, its highest one-day surge since the pandemic broke out, taking the total number of cases to 14.07 million. The death count rose by 1,038 to 173,123.

On Monday, the Centre had granted emergency use approval to Russia's highly effective Sputnik V coronavirus vaccine, making it the third such shop approval.

The surge in covid cases has pushed many states to put partial lockdowns in several parts of the country.

"Going ahead, Indian markets are likely to be highly volatile and would be an interplay of resurgence in covid-19 cases and the pace of vaccination. However, there could be some positive impact from the earnings season which starts off from this week", said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

"We expect Q4 to be another strong quarter and investors would watch out for management commentary given the resurgence of Covid fear which may pose a risk to the growth estimates", Khemka added

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Weak macro economic data is also putting pressure on the market. CPI-based retail inflation came in at a four-month high of 5.5% year-on-year (y-o-y) in March 2021 while IIP declined 3.6% y-o-y in February 2021 compared to a fall of 0.9% y-o-y in January 2021.

According to brokerage firm Anand Rathi, this may impact financial markets in the near term. Yet, with continued supportive policies and a low base, he expects a marked recovery in FY22.

"In the absence of improvement in the economy, inflation will likely come down because the consumption will come down too. But this could set a bad trend as the economic recovery was very nascent. Being hit at this stage can have an adverse impact on growth which at the current situation is more important to manage than inflation", said Sanjay Kumar, CEO & MD, Elior India

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