Sensex's bitter relationship with Mondays gets worse

Equity markets have developed a bitter relationship with Mondays as most share market crashes are occurring in the beginning of the week. 55 per cent of the 20 worst Indian stock market crashes, with the fall of over 1,000 points, have occurred on Mondays. This includes 1,391 points of losses in Sensex in early trade today.  

March 23, 2020, when the Sensex saw the steepest single-day fall of 3,935 points, was a Monday too. The third, fourth and fifth biggest falls were again on Mondays- in March and May when the surging infections and ensuing nationwide lockdown pulled the Sensex down over 1,900 points.

Altogether, 19 such worst single-day falls have roiled Indian equities in the past. Of these, 14 major sell-off took place in 2020 itself and half of them occurred on Mondays. On other occasions, equities have tumbled at the end of the trading week, Thursday (3) and Friday (3).       

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Worryingly, on most of these occasions, the 30-scrip index either struggled or failed to recoup its losses during the week after a hard-hit start. Sample this. After a bloodbath on March 23, the week ended in a negative territory with -0.3 per cent fall. Again, on March 16 and May 04, which were both Mondays,  the index fell over 2,000 points, and both weeks registered a massive decline of 12.3 per cent and 6.2 per cent, respectively.    

Meanwhile, in today's afternoon trade, the bellweather index traded above the intraday low of 48,580.8 points, and is down 1,076 points as rising Covid-19 cases in the country took a toll on investor sentiment. India recorded over 1 lakh coronavirus cases on Sunday, the highest single-day rise since the pandemic began last year.

 "Market over the next few days would monitor as to how the situation pans out in Maharashtra, and also in other states especially 8-10 other states where the Covid cases are rising rampantly. Apart from this the Q4 numbers would start pouring in from mid-April with Infosys and Wipro among the first ones to declare. We are expecting strong 4QFY21 numbers for the IT sector and expect robust FY22 outlook from the management despite cost pressures. Overall, we believe IT and Metals to fare better in comparison to other sectors given the cost pressures faced during the Q4. Thus the month of April is likely to be highly volatile with Q4 earnings, rising Covid cases and higher bond yields to determine the trend," says Hemang Jani, Head Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services.

Also read: Investors wealth falls over Rs 4.54 lakh crore as Sensex crashes 1,449 points

Also read: Sensex crashes 1,400 points as Covid-19 cases cross 1 lakh mark for first time