Sensex tanks 871 points, Nifty down by 229 pts due to surge in COVID-19 cases

Earlier in the day, Sensex tumbled over 1400 points before regaining ground.
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Equity benchmark Sensex tanked 871 points on Monday, dragged by a selloff in financial stocks as spiking COVID-19 cases spooked investors and fanned concerns over economic recovery. After plunging over 1,400 points earlier in the day, the 30-share BSE index pared some losses to finish at 49,159.32, down 870.51 points or 1.74%. Similarly, the broader NSE Nifty sank 229.55 points or 1.54% to 14,637.80.

Bajaj Finance was the top laggard in the Sensex pack, plunging around 6%, followed by IndusInd Bank, SBI, M&M, Axis Bank, Bajaj Auto and ICICI Bank.

On the other hand, HCL Tech, TCS and Infosys were among the gainers.

"The market witnessed a huge sell-off today as India's second wave of COVID-19 is getting bigger than anticipated and is expected to ruin the pace of economic recovery. High valuation added further concern due to a possible downgrade in Q1FY22 earnings," said Vinod Nair, Head of Research at Geojit Financial Services. A policy decision in the upcoming MPC announcement and Q4 earnings will define the market volatility in the coming days, he further added.

Lalitabh Srivastava, AVP research, Sharekhan by BNP Paribas, said that the rise in COVID-19 cases in India is a sobering reminder that challenges to recovery still remain. Further adding that the provisional numbers of key banks indicate a consolidating trend in terms of advances growth but encouraging performance on the deposit and CASA front.

According to Binod Modi, Head - Strategy at Reliance Securities, banks, which started seeing steady improvement in asset quality and improvement in credit costs, may see further delay in credit cycle recovery and pressure in asset quality if business restrictions are imposed by more number of states due to steep rise in COVID-19 cases.

Elsewhere in Asia, bourses in Seoul and Tokyo ended on a positive note. Markets in Shanghai, Hong Kong and Australia were closed for holidays.

Stock exchanges in Europe were also closed.

Meanwhile, the global oil benchmark Brent crude was trading 2.20% lower at USD 63.43 per barrel.

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