Asian markets too were unsupportive, falling up to 1 per cent.
By 9:30 am, the BSE market capitalisation had fallen to Rs 202.29 lakh crore, down Rs 7.33 lakh crore over Friday’s Rs 209.63 lakh crore.
Out of 2,369 stocks that traded for the day so far, 1,928 were in the negative territory. A total of 190 stocks had hit lower circuits with the first 15 minutes of trade.
Investors were also jittery ahead of economic readings such as CPI and IIP, and the January-March earnings report of TCS. A weakening rupee also hurt investor sentiment.
India recorded 1,69,899 Covid-19 cases in the last 24 hours, the highest ever daily increase in infections.
“Any correction due to the second wave of Covid 19 should be used as an entry point,” Prabhudas Lilladher said in a note.
The brokerage said that Nifty50 was trading at one year PE of 27 times recently in the aftermath of Covid, which has distorted past peak PE multiples. “We continue to take an earlier peak of 25 and arrive at a 15-month target of 18,977 against 19,137 earlier,” the brokerage said.
But not all brokerages are positive.
“Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy & markets. Since the situation is the worst in economically significant Maharashtra, this can impact the market’s assumption of around 11 per cent GDP growth and above 30 per cent earnings growth,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Vijayakumar said that the situation may improve if cases peak soon and start coming down.
“But presently, this is a negative. The bad health situation and rupee depreciation have improved prospects for the pharma & IT sectors, which are likely to remain resilient even during a market downturn. Economy- facing stocks are likely to be under pressure,” he said.
