Singapore: India’s benchmark equity index dropped on Monday, set for its worst quarter ever, on concern that government efforts to contain the spread of the novel coronavirus and its economic fallout may not be enough.
The S&P BSE Sensex Index fell 1.8% to 28,286.28 as of 9:42 a.m. in Mumbai after adding more than 10% in the previous three sessions. The gauge is set for a quarterly drop of about 30%, surpassing the previous record of a 28% decline in the quarter through June 1992. That slide followed India’s steps to cede control over the economy, open up for foreign investment, cut tariffs and devalue its currency, to pull the nation from an unprecedented balance of payments crisis.
Cases of Covid-19 in the world’s second-most populous country have ticked rapidly higher in the past week, raising the alarm over the ability of India, with a fragile health-care system and battered economy, to handle a virus crisis of the magnitude of China or Italy’s. India’s policy makers announced a $22.6 billion spending plan and an emergency interest rate cut to shield the economy from a nationwide lockdown imposed to contain the spread of the deadly pathogen that is devastating lives and businesses across the world.
The “measures are not sufficient to prop up plummeting growth, or to stimulate demand when the lockdown ends,” Teresa John, an economist at Nirmal Bang Equities Pvt. wrote in a note on Friday. “The announcements mainly involve reallocation and front-loading of expenditure,” the note added.
While India has seen 27 deaths and just over 1,000 cases, experts fear the real tally could be much higher.
India’s rupee weakened against the U.S. dollar while its sovereign bonds were little changed amid thin trading on Monday, while the NSE Nifty 50 Index fell 1.6%.
The Numbers
All 19 sector sub-indexes compiled by BSE Ltd. dropped, led by a gauge of financial companies.
Twenty-eight of the 30 Sensex members declined. Bajaj Finance Ltd. and Mahindra and Mahindra Ltd. were among the top losers. -Bloomberg
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