Indian stocks dropped on concern that increasing coronavirus infections and the extension of restrictive measures in some states will hinder a recovery in Asia’s third-biggest economy, which has just begun to reopen.
The S&P BSE Sensex and the NSE Nifty 50 Index both fell 1.4% as of 10:13 am in Mumbai, set for their lowest close in more than a week. Still, both measures remain set for only their second month of gains this year and best quarter since 2009.
“Investors are pricing in the rising pace of infections, which is extending lockdowns at some states and companies,” said Sameer Kalra, an investment strategist at Target Investing in Mumbai. “June-quarter results will be very bad due to a bumpy reopening of the economy.”
The spread of virus prompted states to extend curbs from the world’s strictest lockdown imposed since March that triggered a collapse in economic growth.
With world’s fourth-highest number of coronavirus infections, the South Asian nation is expecting its first contraction in GDP in more than four decades.
The rupee was little changed at 75.645 versus the U.S. dollar, while the yield on the most-traded 6.45% 2029 government bond fell 1 basis point to 6%.