Stock market index Sensex plummeted as much as 1,400 points on Monday, pulled down by huge losses in financial stocks amid concerns over spike in COVID-19 numbers in the country. Among the stocks that took a hit were IndusInd Bank, which tanked over 6%, followed by Bajaj Finance, Axis Bank, SBI, Bajaj Auto, Bajaj Finserv, ICICI Bank, HDFC twins and Reliance Industries.
So, what does this market crash translate into? Here's a look at the cascading effect of the market blues on the common man
* Lower stock prices mean less wealth for businesses, pension funds, and individual investors.
* For small investors, who tentatively invest in stocks in view of the diminishing returns on savings in banks, this comes as a big hit. Their market investments will not give them the returns they hoped for.
* This leads to reduction in consumer spending, which in turn will hit the already-staggering economy.
* Companies that are not performing well are not able to get as desired funding for operations and expansion.
* And if businesses do not expand, jobs market will also stagnate and there will be no jobs up for the taking.
* More than anything else, the stock market is a vote of confidence, a reflection of the mood of the economy. A market crash affects investor confidence.
Markets opened down following strict guidelines issued in Maharashtra amidst rising coronavirus cases. India on Sunday recorded 103,844 COVID-19 cases pushed by 57,074 in Maharashtra, highest since the pandemic began in March, last year.
Maharashtra, the financial capital of the country, announced several restrictions to contain the numbers. Last week, Chief Minister Uddhav Thackeray had warned that if COVID numbers continued to gallop, he may have to consider imposing a lockdown.