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Current Affairs

Sensex falls sharply

Date: 20 April 2021 Tags: Miscellaneous

Issue

The Sensex at the Bombay Stock Exchange fell by over 1000 points as a result of spike in Covid-19 infections across the country.

 

Background

Covid-19 cases have been spiralling since couple of weeks. This has raised further threats of a complete lockdown of the economy.

 

Details

  • The Indian rupee fell by 47 paise against the US dollars in the early morning trade to stay at 74.82 at the end of the day.

  • This is not the first time that Monday has observed a fall in Sensex. This is the third Monday when Sensex has fallen by over 1000 points.

  • The indices have come under pressure owing to fear of a lockdown in states such as Maharashtra that is observing continuous rise.

  • The market is vary of the effects of lockdown on the recovery of the economy and GDP growth that had already suffered last year.

  • The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) has slipped to a seven month low indicating slowdown of industrial output.

  • The manufacturing sector is also set to experience slowdown as a result of fresh surge in Covid-19 pandemic cases with situation becoming more challenging in future.

 

Government response

  • To dispel fears of a nation-wide lockdown, the finance minister held a meeting with industry representatives.

  • Even though this measure has instilled some confidence in market, the state wise indications are not that promising.

  • The increasing pace of vaccination process and experience in preventive measure has created a better perspective.