Markets fall 1% after Maharashtra govt announces stricter covid restrictions

The BSE Sensex slipped or 1.51% to close at 48,440.12, while Nifty fell 1.54% to close at 14,324.90.mint (MINT_PRINT)Premium
The BSE Sensex slipped or 1.51% to close at 48,440.12, while Nifty fell 1.54% to close at 14,324.90.mint (MINT_PRINT)
 1 min read . Updated: 20 Apr 2021, 03:18 PM IST Ravindra N. Sonavane

MUMBAI : Indian markets on Tuesday erased all their morning gains and fell over 1% after the government of Maharashtra announced more stricter, localized restrictions.

At 3 pm, the Sensex fell 1%, or 500 points, to 47,519 points, while Nifty declined 1.01% to 14,233.95 points. Earlier in the day, Sensex surged nearly 530 points, while Nifty gained as much as 168 points.

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The Maharashtra government will now further restrict timings of grocery shops to just four hours a day, from 7am to 11am.

Delhi chief minister Arvind Kejriwal on Monday announced a six-day-long lockdown in the national capital from 10 pm to 6 am next Monday.

The government on Monday threw open its vaccination drive to everyone over the age of 18 from 1 May under a market-based system that it claimed would encourage vaccine makers to boost production.

The rise in new cases of covid-19 infections and subsequent lockdowns could have a deeper impact on economic activity in the coming weeks, according to Nomura.

The Nomura India Business Resumption Index, which tracks ultra-high frequency data, including mobility, has fallen close to 16 percentage points below the pre-pandemic normal. As on 18 April, the index had slipped to 83.8 compared with 88.4 a week ago.

Sensex on Monday plummeted 2% following a massive across-the-board selloff as mounting covid-19 cases spooked domestic investors who feared harsher restrictions and more economic pain.

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As of 19 April, daily cases continued to surpass the 200,000 level. More populous states in the last week (12-19 April) reported an increase in weekly growth rates and share of covid-19 cases.

Among the states, though, the rate of spread has not been secular. Infection rates in Uttar Pradesh, Madhya Pradesh and Delhi significantly increased in the week ending 19 April (compared with the week prior) and, consequently, led to an increase in their share of case load.

"Going forward, the covid-19 situation and the pace of vaccination would be a key monitorable for the markets. Further, the earnings announcement from select Nifty majors would induce stock-specific volatility. We maintain our cautious stance in the near term," said Ajit Mishra, VP-research, Religare Broking.

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