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Benchmark equity indices BSE Sensex and NSE Nifty tanked over 2% in Monday’s morning trade, tracking heavy losses in index-heavyweights HDFC twins, ICICI Bank and Reliance Industries. The 30-share BSE index traded 1,427 points lower at 48,164.32, while the broader NSE Nifty plunged 432 points to 14,402.95.

IndusInd Bank was the top loser in the Sensex pack, tanking around 8 per cent, followed by SBI, Bajaj Finance, Bajaj Auto, Titan, ICICI Bank, Bajaj Finserv and Maruti. On the other hand, Infosys was the sole gainer.

“Since the second wave of the pandemic is turning out worse than expected, there is profound uncertainty about its impact on the economy and markets,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The situation is the worst in economically significant Maharashtra. This can impact the market’s assumption of around 11% GDP growth and above 30% earnings growth, he added. Here are the key factors that dragged markets lower today.

Spike in Covid cases: Concerns over rising Covid-19 cases in the country and fears of lockdown in certain states may also weigh on market sentiment. Breaking all records, India has recorded a massive surge of 1,69,899 Covid-19 cases in the last 24 hours. Worldometer showed that with this, India has once again taken its spot as the second-worst hit nation with 13,525,364 cases in total. Maharashtra on Sunday reported over 63,000 new coronavirus cases in its highest ever single-day surge along with 349 deaths. Fitch Ratings has said the second wave of COVID-19 infections poses increased risks for India’s fragile economic recovery and its banks. The rating agency expects a moderately worse environment for the Indian banking sector in 2021, but headwinds would intensify if rising infections and follow-up measures to contain the virus further affect business and economic activity

Selling by FIIs: There will be some cautiousness with report that foreign portfolio investors (FPIs) have withdrawn a net Rs 929 crore from the domestic markets so far this month amid concerns over rising Covid-19 cases denting the economic recovery.

Weak global cues: Subdued global cues further impacted market mood. Asian peers, Hang Seng, Nikkei and Shanghai were down up to 1% in the afternoon trade.

Rupee hits 9-month low: Weakness in rupee further deteriorated market sentiment. The local currency slumped 30 paise to 55.06 against the US dollar in early trade.