The Indian benchmark indices fell more than one percent on Wednesday amid fear of a massive jump in coronavirus cases and identification of new mutant variants in the country's 18 states. Metals, auto, and financial stocks also witnessed a major sell-off by investors.
Among the headline indices, the S&P BSE Sensex fell around 900 points, or 1.75 percent, to 49,180 and the broader Nifty50 index sank beneath the 14,600 mark. Market leaders such as Mahindra & Mahindra, ICICI Bank, Axis Bank, and State Bank of India fell more than 3 percent each.
Experts believe that investors had already discounted a sharp recovery in global GDP growth in 2021 but new mutant variants of coronavirus in India and a third wave of infections in countries such as Germany, France and Italy may dent estimated global GDP growth in the coming months.
"The recent crash in crude is a reflection of reduced demand emanating from declining economic activity. In India, the second wave in some prominent cities is adding to the concern," VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
India reported the highest number of deaths (275) from COVID-19 infection so far this year on Wednesday as infections rose by 47,262 in the past 24 hours.