Covid-19 fears continued to impact the equity markets on Monday as the S&P BSE Sensex and the Nifty 50 closed over 1,375 points (-4.61%) and 379 points (-4.38%) lower compared to Friday’s close.

During the day, at their respective daily highs of 29,497.57 points and 8,576 points, the Sensex and the Nifty traded over 318 points (-1.07%) and 84 points (-0.97%) lower than their Friday close of 29,815.59 points and 8,660.25 points respectively.

The situation is much better when compared to last Monday’s mayhem: On March 24, the Sensex and Nifty 50 had recorded their 52-week lows of 25,638.9 points and 7,511.1 points respectively. At 28,290.99 points and 8,244 points today, the respective indices were over 2,652 points (+10.34%) and 732 points (+9.76%) as against last Monday’s numbers .

The S&P BSE MidCap and SmallCap performed relatively better with a decline of over 224 points (-2.13%) and 166 points (-1.75%), respectively.

Vinod Nair, head of research at Geojit Financial Services, opines that on expected lines, the markets have set aside the stimulus measures announced by the RBI and the government, and focused on the rising virus infections and its impact on the Indian economy. “With a global recession already declared by the International Monetary Fund (IMF), the recessionary forces and the general uncertainty are forcing investors, especially the FIIs, to redeem their investments,” says Nair.

According to Shrikant Chouhan, executive vice president, equity technical research at Kotak Securities, the benchmark indices closed lower for the second consecutive day as the Coronavirus threat continued to spook investors. “Investors are concerned about the rising number of cases across the globe and the economic fallout due to complete lockdown in most parts of the world,” says Chouhan.

Chouhan further highlights that the dollar index demand has reduced considerably over the weekend, and gold has risen to $1,625 per ounce. Also, oil prices declined, while 10-year G-Sec yield fell by 4.90%. “These are certainly not positive signals for the economy in the medium term,” says Chouhan. “It would be difficult for the market to bounce back in the absence of any positive news flow regarding Covid-19,” he adds.

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