Indian shares fall nearly 2% as financials drag, coronavirus cases surge

BENGALURU, March 24 (Reuters) - Indian shares closed lower on Wednesday, dragged down by financial stocks and weakness in global markets, as worries over the economic impact from a continued surge in coronavirus cases dented sentiment.

The blue-chip NSE Nifty 50 index closed down 1.8% at 14,549.40 and the benchmark S&P BSE Sensex dropped 1.7% to 49,180. Both the exchanges saw their worst one-day percentage fall since Feb. 26.

India has detected a new “double mutant variant” of the novel coronavirus, the health ministry said on Wednesday, adding to concerns as the government struggles with the highest single-day tally of new infections and deaths this year.

“Indian market witnessed across-the-board selling amidst high volatility owing to weak global cues and spike in COVID-19 cases,” said Vinod Nair, head of research at Geojit Financial Services.

The second and third wave infections in India and Europe, respectively, are bound to hamper economic recovery, Nair said.

Global shares eased on Wednesday as optimism over the pace of recovery from COVID-19 that propelled markets to record highs was fizzling out in the face of more lockdowns in continental Europe.

The Nifty bank index and finance index fell 2.6% and 2.1%, respectively, while the metals index dropped 3.2%.

The Nifty bank index had risen more than 2% on Tuesday after India’s top court rejected pleas for extending moratorium on bank loan repayments.

Shares of speciality chemicals maker Anupam Rasayan India fell 6.3% in their market debut in Mumbai after the company’s 7.60 billion rupees ($104.67 million) initial public offering was subscribed more than 44 times.

Indian fundraising via IPOs is at a 13-year high as a flood of foreign money and unprecedented interest from mom-and-pop investors spur more listings, making India one of the hottest IPO markets in 2021. ($1 = 72.6070 Indian rupees)

Reporting by Nallur Sethuraman in Bengaluru; Editing by Amy Caren Daniel