The Sensex plummeted 1,708 points while the Nifty crashed below the 14,350-level on Monday as investors pressed the panic button amid the massive second wave of COVID-19 infections across the country.
The second wave is turning out to be much worse than expected, and participants are now reassessing their recovery forecasts amid increasing localised lockdowns, traders said. An unabated fall in the rupee sapped confidence further, they added.
Posting its biggest fall since February 26, the 30-share BSE Sensex sank 1,707.94 points or 3.44% to end at 47,883.38. Similarly, the broader NSE Nifty plunged 524.05 points or 3.53% to finish at 14,310.80.
Barring Dr Reddy's, which climbed 4.83%, all Sensex stocks closed in the red. IndusInd Bank was the top loser, tanking 8.60%, followed by Bajaj Finance, SBI, ONGC, Titan, M&M, Axis Bank, ICICI Bank and Bajaj Finserv.
Investors lost Rs 8.77 lakh crore in the session, with the market capitalisation of BSE-listed stocks declining to Rs 200.85 lakh crore.
India recorded yet another peak in daily COVID-19 cases with 1,68,912 new cases, the highest single-day rise since the pandemic began, taking the total tally to 1,35,27,717, according to the Union Health Ministry data updated on Monday. The national COVID-19 recovery rate has fallen below 90%.
"Further implementation of lockdowns and all-time high COVID cases have dragged the market to a monthly low. This is expected to impact the economic growth of Q1 FY23 more than thought earlier.
"Implications to the banking and discretionary sector are presumed to be the highest, drifting market to defensives like IT, Pharma and FMCG. This trend may happen for a couple of trading weeks, down a few weeks COVID cases are likely to reduce, bringing growth back," said Vinod Nair, Head of Research at Geojit Financial Services.
All sectoral indices ended with heavy losses, with BSE realty tanking 7.70%, followed by industrials, metal, auto, power, finance and bankex. Broader BSE midcap and smallcap indices nosedived up to 5.32%.
Global markets retreated from record highs as investors awaited corporate results and macroeconomic data. Elsewhere in Asia, bourses in Shanghai, Hong Kong and Tokyo were in the red, while Seoul ended with mild gains. Stock exchanges in Europe were largely trading on a positive note in mid-session deals.
Meanwhile, international oil benchmark Brent crude was trading 0.57% higher at $63.31 per barrel.
The Indian rupee fell for the sixth straight session to mark its lowest level in nearly nine months at 75.05 against the American currency on Monday as investors fretted over the prospects of lockdown in some parts of the country amid continuous rise in COVID-19 cases.