COVID-19: Lockdown fears cause another bloodbath on D-Street

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The Bombay Stock Exchange’s (BSE) Sensex continued its free fall and breached the 10% mark before trading stopped. The Sensex finally settled at around 26,000 while Nifty also breached its safety mark.

What made Sensex which was around the 40,000 mark in the beginning of March to fall so steeply, leading to a wipeout of thousands of crores of Rupees?

ALSO READ: COVID-19: Positive cases in India rise to 415; India battles lockdown

Stopping of all economic activities: Mahindra and Mahindra stopping their manufacturing and Samsung shutting down two their factories and various other such shutdowns. These are just two examples of the recession that is affecting India.

State of Lockdown: Around 75 districts across the country including big cities like Mumbai, Bengaluru, Hyderabad, New Delhi and Gurugram are in a state of lockdown due to the virus.

All establishments other than those dealing with essential services have been asked to shut down and not operate till March 31. This has devastated the economy to a great extent.

FII investors pull out– As the US Federal Bank tinkers with the Interest rates, crucial Portfolio investment is leaving the country, thus impacting the Sensex and making the dollar dearer at Rs 76 and above.

Delay in US fiscal stimulus– Even as the US Congress is delaying the request of the administration to facilitate a fiscal stimulus, markets around the world are crashing.

Increase in number of COVID cases– India has about 415 positive cases and a total of seven deaths till date and this number that will prevent the Government from relaxing the lockdown conditions and for the market to rebound.

Globally, all markets are experiencing stressed conditions and India is not an exception. It is well integrated with the world economy and will continue to experience bearish sentiments for the times to come as total positive cases reach above 3.39 lakh.

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