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Mumbai: Indian markets plunged 2% on Friday after showing resilience earlier this week as covid cases continued to rise at an explosive pace and uncertainties about vaccine supplies lingered.

Weakness in global equities and nervousness ahead of state assembly election results due over the weekend also dented investors’ sentiment.

The BSE Sensex fell 983.58 points, or 1.98%, to 48,782.36. The Nifty dived 263.80 points, or 1.77%, to 14,631.10.

Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd, said weak global cues and exit polls of state elections indicating mixed results contributed to the decline
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Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd, said weak global cues and exit polls of state elections indicating mixed results contributed to the decline


Markets in the Asia-Pacific region declined as investors turned cautious. Japan’s Nikkei, South Korea’s Kospi, China’s Shanghai Composite and Hong Kong’s Hang Seng index declined 1-2%.

Siddhartha Khemka, head of retail research, Motilal Oswal Financial Services Ltd, said weak global cues and exit polls of state elections indicating mixed results contributed to the decline. “Shortage of vaccines dented market sentiments while India continued to report a record daily increase in covid infections. Fear of further localized lockdowns across states and thus its impact on the overall economic recovery led to profit booking," he said.

As the Indian markets face the second wave, foreign institutional investors continue to dump Indian shares. According to UBS, India may see an outflow of about $5 billion in the near term. “If historical trends hold, India could see about $5 billion of equity outflows. If valuations correct faster, the drawdown might be smaller, while if equity valuations are slow to correct and the covid situation worsens, we could see a larger drawdown," UBS said in a report on 27 April.

The second wave of the pandemic in India has seen daily cases surge to unprecedented levels.

About 11.3% of the India population has been vaccinated at least once, and although coverage is set to widen from 1 May, a shortage of vaccine is adding to uncertainties. Imported vaccines are due to arrive in May, while the two domestic suppliers are likely to ramp up supply to states and private health providers by mid-year.

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