Sensex tumbles amid record jump in Covid cases: Key factors hurting Dalal Street

NEW DELHI: A record single-day jump in Covid-19 cases in the country clipped Dalal Street's wings on Monday, as bears dragged benchmark indices violently. Volatility indicator India VIX shot up amid selling across sectors.

Better-than-expected jobs data and economic recovery in the US are big positives, say analysts. However, back home, the fast-rising Covid-19 cases are a cause of concern.

Restriction of economic activity in many parts of the country might impact economic recovery, said an analyst.

“Macro numbers like record GST collections and auto sales numbers for March indicate a strong economic rebound. Q4 results will be very good and this can impart resilience to markets. How the Covid cases pan out, going forward, is a crucial factor," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

FACTORS DRIVING MARKETS
Good News

• Easing US unemployment: In March, the US economy created most jobs in seven months, as more Americans got vaccinated and the government doled out additional pandemic relief money, marking the start of what could be the strongest economic performance in nearly four decades this year.

Bad news

• Covid-19 cases: The coronavirus situation in India remained grim on Sunday as over 1 lakh new infections were recorded, the highest single-day jump since the pandemic began.
• Europe wary: New Covid-19 restrictions in France will impact economic growth this year but it is too early to say by how much, Finance Minister Bruno Le Maire said on Friday.
• Yields rise: Yields on longer-dated bonds also rose, with 10-year notes at 1.725 per cent in Asia on Monday, extending their rise that began on Friday after the jobs report. The strong jobs data helped in underpining the dollar.

How are the blue chip stocks doing?
The 30-share pack Sensex plummeted 870.51 points or 1.74 per cent to close at 49,159.32, having plunged 1,450 points at the weakest level of the day. Its broader peer NSE Nifty tumbled 229.55 points or 1.54 per cent to settle at 14,637.80.

In the 50-share pack Nifty, Infosys was the biggest gainer, up 2.20 per cent. JSW Steel, HCL Tech, Wipro, Britannia, TCS, Grasim, Tata Motors, Tech Mahindra, Cipla and UPL were among other gainers.

IndusInd Bank was the top loser in the pack, down 3.61 per cent. Bajaj Finance, Axis Bank, SBI, ICICI Bank, Bajaj Finserv, HDFC, Bajaj Auto, ONGC and HDFC Bank were other losers.

Broader markets
Broader market indices also traded with cuts, but looked better positioned than their headline peers. Nifty Smallcap was down 0.35 per cent while Nifty Midcap dropped 0.47 per cent. The broadest index on NSE -- the Nifty 500 -- was down 0.55 per cent.

SAIL, Adani Total Gas, Dr Lal Pathlabs, Happiest Minds, Tanla Platforms and Future Retail were gainers from the space, while Indian Hotel, Vodafone Idea, Apollo Tyres, BEML, APL Apollo and Delta Corp were under selling pressure.

Global markets
US S&P 500 futures traded 0.5 per cent higher, maintaining their gains made during a truncated session on Friday though tech-heavy Nasdaq futures traded almost flat.

In Asia, Japan's Nikkei rose 0.8 per cent while MSCI's broadest index of Asia-Pacific shares outside Japan was almost flat, with China closed for Tomb-Sweeping day and Australia on Easter Monday.

MSCI's All-Country World index was almost flat but stood near its highest level since late February and within sight of a record high set that month.