Nifty posts 6.7% weekly drop as investors continue to fret over Covid-19

The Indian markets declined more than 2 per cent on Friday as investors continued to fret over the corporate and economic impact of the Covid-19 pandemic, which has now infected more than a million people globally.  Investors were left disappointed after Prime Minister Narendra Modi in his video message refrained from offering any measure to help repair the economy. 

The Sensex closed at 27,591, down 674 points, or 2.4 per cent. The Nifty fell 170 points, or 2.06 per cent, to end at 8,084. The Nifty index fell 6.7 per cent during the week, while the Sensex fell 7.5 per cent. Both indices have declined in three of the last four weeks. Market experts said inve­stors were hoping that the PM would ann­ounce concrete steps to contain the spread of Covid-19 or any update on whether the 21-day lockdown would be extended. While the government and the Reserve Bank of India (RBI) have provided relief packages, experts say more needs to be done as the shock because of the sudden stoppage of economic activities is huge. The United Nations Department of Economic and Social Affairs this week said global economic growth could shrink to 1 per cent, reversing its earlier forecast of 2.5 per cent growth. The agency said growth could contract further if restrictions on economic activities are extended without further stimulus.

“The bigger concern is the economic fallout of the Covid-19 pandemic. We were under the impression that things will be back to normal once the lockdown is over, but it now seems there will be a lot of restrictions even after the lockdown is lifted and this is adding to the panic,” said G Chokkalingam, founder, Equinomics.

Oil prices fluctuated after soaring 22 per cent on Thursday.  Analysts said investors were sceptical of the Saudi Arabia-Russia deal to cut oil production. Also, the lockdown announced in Singapore weighed on sentiment.

“Lack of clarity regarding talks between Russia and Saudi Arabia affected sentiment. The news that there will be a one-month lockdown in Singapore added to the nervousness as a lot of foreign investors are based there,” said Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services. Barring six, all the sectoral indices of the BSE ended the sessions with losses. Banking and finance stocks fell the most, with their gauges falling 5.4 per cent and 4.4 per cent, respectively. On the other hand, shares of pharmaceutical companies surged, with the BSE Healthcare index, gaining nearly 4 per cent.
 

Analysts said pharma stocks are relatively better placed to ride the market turmoil. They said the US is facing a drug shortage and there are expectations that the US FDA will be more flexible towards Indian pharma companies.

Overall, 195 stocks hit their 52-week lows. The market breadth was slightly positive, with total advancing stocks at 1135 on the BSE and those declining at 1104.

Two-thirds of the Sensex components ended the session with losses. Axis Bank was the worst-performing Sensex stock and fell 9.2 per cent. Titan, ICICI Bank, and IndusInd Bank fell 8 per cent or more.