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Black Friday: Sensex crashes over 3,500 points, Nifty below 8,600 – India Today

The worst is not over for Indian stock markets which again collapsed on Friday as soon as trading started on Dalal Street.

As the spread of novel coronavirus spooked investors, benchmark equity indices Sensex and Nifty plummeted sharply.

By 9:30 am, trading activity had already been stopped for at least 45 minutes as the Nifty hit lower circuit of 10 per cent amid massive global sell-off. Trading resumed again at 10:05 am, but there was no improvement.

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Sensex fell by 3,090 points or 9.43 per cent at 29,687.52 while Nifty breached the 10 per cent lower circuit to fall below 8,700. The development comes at a time when the coronavirus pandemic has kept investors around the world on edge.

When trading resumed at 10:05 am, Sensex declined by over 3,500 points or over 10 per cent while Nifty fell over 1,000 points or over 11 per cent.

The domestic share markets in India have had one of the worst weeks in history as there has been no improvement in global markets, which have been registered massive falls over consecutive trading sessions.

Analysts expect the volatility to continue in both domestic and international stock markets as uncertainty remains over the economic impact of the virus.

Global rout

Global stock markets crashed on Friday, ending a years-long bull run, with coronavirus panic selling hitting almost every asset class and leaving investors nowhere to hide.

Half a trillion dollars in liquidity from the US Federal Reserve and the promise of more were not enough to calm the fear that has wiped some $14 trillion from world stocks in a month.

On Friday, Japanese stocks were in freefall and markets from Seoul to Jakarta punched through downlimit circuit breakers.

The Nikkei .N225 dropped as far as 10 per cent and is heading for its worst week since the 2008 financial crisis. Not one stock on the index is in positive territory.

Losses were equally staggering outside Japan, driving MSCI’s broad Asia-Pacific index .MIAPJ0000PUS back to where it was in 2017. Gold and oil fell and once-safe sovereign bonds slumped as investors liquidated everything they could to cover losses.

Even after its worst crash since Black Monday in 1987 overnight, Dow futures YMc1 are down about 3 per cent in Asia, as are S&P 500 futures ESc1.

“There is a sense of fear and panic,” said James Tao, an analyst at stockbroker Commsec in Sydney, where phones at the high-value client desk rang non-stop.

“It’s one of those situations where there is so much uncertainty that no-one quite knows how to respond…if it’s fight or flight, many people are choosing flight at the moment.”

Australia’s benchmark fell as far as 8 per cent and is set for its worst week on record. In South Korea the won was shredded and the Kospi .KS11 fell 7.7 per cent. Hong Kong’s Hang Seng index .HSI fell 5 per cent. China’s Shanghai composite .SSEC fell 3 per cent.

In currency markets the dollar was king and Asian currencies haemorrhaged as fears of systemic risks drove demand for the world’s reserve currency.

Majors stabilised after furious dollar buying overnight, with the euro EUR= finding footing around $1.1200 and the Aussie AUD=D3 recovering to $0.6300.

Emerging market currencies were punished: the won KRW= and baht THB= dropped 1% and the rupiah IDR= 2 per cent.

(With inputs from Reuters)

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