Covid cases surge in India: Will it trigger a stock market crash?

India Today

22-05-2025

The market rally on Dalal Street came to a pause on Thursday against the backdrop of rising Covid-19 cases in India and other parts of Asia as both Sensex and Nifty saw a sharp fall.The S&P BSE Sensex had dropped by over 900 points to 80,681.76, while the NSE Nifty50 was down 266 points at 24,547.45 as of 12:45 pm. The fall in the market comes after days of strong performance.The recent decline in the stock market has come at a time when Covid-19 cases are slowly increasing again. Kerala has reported 182 cases in May alone, while cities like Mumbai, Chennai and Ahmedabad have seen small but noticeable spikes in infections.Outside India, several Asian countries have also seen a rise in cases. Hong Kong, Singapore and Thailand are currently reporting more infections, sparking concerns that the virus might be making a slow comeback.IS COVID BEHIND THE MARKET DROP?The fall in the markets has raised the question: Should investors worry about the rising Covid cases?Kranthi Bathini, Equity Strategist at WealthMills Securities Pvt Ltd, said that the early signs of rising cases could be one reason behind the fall in some sectors."There is a sense of worrying factor there. That is the reason we can see some kind of an uptick in healthcare, diagnostic stocks and also in pharma stocks,' he said.He added, 'Whether it is just the beginning or a sign of something bigger, we will have to wait and see. Right now, it is premature to say anything definite about Covid cases because numbers are still low and mostly in single digits in many states. The next few weeks will be important to watch.'Bathini also pointed out that the overall market conditions remain stable."The market has outperformed in the last month after touching a high of 25,500 range. What we are witnessing is some kind of profit booking because of global cues, US debt worries and also US downgrades, which is creating pressure on the market in the short to medium term."He explained that Nifty seems to be forming a base between 24,500 and 25,000.'We had a decent earnings season. There were no major negative surprises. There is stock-specific action happening now as we are at the far end of the earnings season,' he said.While there is some concern, experts say there is no need to panic yet.'Investors are a bit more seasoned now when it comes to COVID news. Pharma might see some defensive interest, but overall, market fundamentals remain strong. Volatility? Maybe. Panic? Unlikely,' said Trivesh, COO of Tradejini.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)Must Watch
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