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Nifty, Sensex slip as virus cases spiral; consumer stocks drag
Photo Credit: Reuters

Indian shares fell on Thursday led by consumer stocks, as coronavirus cases in the country continued to spike steadily despite a strict weeks-long nationwide lockdown that has hurt economic growth.

The NSE Nifty 50 index ended 0.78% lower at 9,199.05, while the S&P BSE Sensex settled down 0.76% at 31,443.38. Both indexes are down about 24% in 2020.

India, which has been under the world's biggest lockdown since late March, said coronavirus infections reached 52,952, while the death toll hit 1,783.

The lockdown, which came as economic growth had already slowed to multi-year lows, has left hundreds of thousands of Indians out of work and many companies with zero revenues in April.

India this week allowed some economic activity to restart in less-affected regions, but the spreading contagion would put pressure on Prime Minister Narendra Modi to keep curbs in place, so it does not spin out of control and overwhelm the limited public health system.

"The recent surge in COVID-19 cases in India and the unending wait of the stimulus package has started taking a toll on investors' sentiment," said Ajit Mishra, vice-president of research at Religare Broking Ltd in New Delhi.

Economists have predicted that India will need further fiscal stimulus to support growth, and the government is expected to unveil such measures soon, although their exact nature remains uncertain.

The Nifty FMCG index that tracks consumer goods producers fell 1.41% with 11 out of its 15 stocks closing lower.

Biscuit maker Britannia Industries Ltd shed 2.4%, while Hindustan Unilever closed 0.9% lower after GSK sold a more than $3 billion stake in the company in India's largest-ever block trade.

After see-sawing in recent sessions, banking stocks had a mixed day. IndusInd Bank and Yes Bank each climbed 6.8%, with the latter boosted by a surprise quarterly profit.

But HDFC Bank and Kotak Mahindra Bank were the top drags on the Nifty 50, falling 2.3% and 3.7%, respectively.

Citing a hit to business from coronavirus, Kotak Mahindra Bank cut salaries by 10% for employees earning more than Rs 25 lakh ($33,000) a year, becoming one of the first Indian lenders to announce such a move.

Meanwhile, global stocks climbed after a surprise rise in Chinese exports for April, stoking speculation that China could recover quicker than earlier thought and support global growth in the process.

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