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India stock markets slump over 1% on surging covid infections

The Bombay Stock Exchange (BSE) building is pictured next to a police van in Mumbai, India, August 24, 2015. India's benchmark BSE index fell more than 5 percent on Monday to their lowest in a year, as a rout in Chinese equities sparked widespread unrest in global financial markets. REUTERS/Danish Siddiqui/File Photo (REUTERS)Premium
The Bombay Stock Exchange (BSE) building is pictured next to a police van in Mumbai, India, August 24, 2015. India's benchmark BSE index fell more than 5 percent on Monday to their lowest in a year, as a rout in Chinese equities sparked widespread unrest in global financial markets. REUTERS/Danish Siddiqui/File Photo (REUTERS)

  • Investors will await the RBI's monetary policy statement on Wednesday. Analysts do not see any immediate change in the monetary policy and expect the rate-setting panel to maintain a dovish stance, especially with rising covid cases

MUMBAI: Indian equities tanked in early deals on Monday, led by losses in index heavyweights such as HDFC twins, Reliance Industries Ltd and ICICI Bank, due to a fresh surge in coronavirus infections in the country.

At 9.57am, the benchmark Sensex was down over 1% at 49,360.02 points, while Nifty fell 1.1% to 114,695.10 points.

"We are still trading in a restricted range which is between 14650 and 14900. Unless we are able to get past 14950, the Index wont propel further. If we manage to do that, the markets could move towards 15300. On the flip side, if we break 14500-14600 on a closing basis, the Nifty can go down further to retest the previous lows of 14200," said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

India recorded more than one lakh covid-19 cases over the last 24 hours, a record. The previous such surge was seen on 16 September last year, with 97,894 cases. The active caseload has now topped 7,00,000 mark.

The Maharashtra government on Sunday announced new curbs, including a night curfew from 8 pm to 7 am and a weekend lockdown amid an unprecedented surge in infections.

Investors, meanwhile, will focus on fourth quarter results, which will start mid-April. They will also await the Reserve Bank of India's monetary policy announcement on Wednesday.

Analysts do not see any immediate change in the monetary policy and expect the rate-setting panel to maintain a dovish stance, especially given the wit second wave of the pandemic.

"Given growth uncertainty due to the second wave, we expect the RBI to maintain the policy status quo on 7 April, both on policy rates, as well as its ‘accommodative’ stance, although we also expect it to refresh its forward guidance. In the medium term, the economy appears to be approaching a policy inflection point and growth-inflation dynamics are likely to turn in the direction of policy normalization, in our view", said Nomura Research in a note to its investors.

Investors will also eye minutes of the latest US Federal Reserve meeting, due on Wednesday.

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