A deep selloff across sectors – led by banking, auto and metal stocks – damaged the markets
Highlights
- Trading resumed at 10:58 am after 10% fall in markets triggered circuit
- Financial stocks led deep selloff across sectors
- Midcap, smallcap benchmarks suffer double-digit percentage losses
Trading in the domestic stock markets resumed after a 45-minute halt following a 10 per cent plunge each in benchmark indices S&P BSE Sensex and Nifty 50. The Sensex index plunged as much as 3,594.08 points to 26,321.88 within the first hour of trade after the halt, and the broader Nifty benchmark dropped to as low as 7,710.45, down 1,035 points from the previous close. Earlier, the Sensex and Nifty had frozen at 27,608.80 – down 2,307.16 points from the previous close – and 7,903.00 (down 842.45 points) respectively, triggering the lower circuit breaker. India entered a lockdown joining several countries in their fight against the deadly coronavirus (COVID-19) outbreak.
Here are 10 things to know about the big selloff in the markets:
At 11:39 am, the Sensex traded 3,261.90 points – or 10.90 per cent – lower at 26,654.06, and the Nifty was down 946.80 points – or 10.83 per cent – at 7,798.65. A deep selloff across sectors – led by banking, auto and metal stocks – damaged the markets.
The Nifty Bank index – comprising stocks of 12 major lenders in the country including heavyweights SBI, HDFC Bank and ICICI Bank – was down 14.56 per cent.
Twenty six components in the Nifty basket of 50 stocks were down with double-digit percentage losses at the moment. Worst hit were IndusInd Bank (down 22.11 per cent), Bajaj Finserv (21.10 per cent), Grasim (19.99 per cent), Axis Bank (19.61 per cent), Adani Ports (18.90 per cent and Bajaj Finance (18.67 per cent).
Besides Nifty Bank, all other 10 sectoral indices on the National Stock Exchange suffered losses till the trading halt, and so did all of the 50 components in the Nifty basket of shares.
Mid- as well as small-cap stocks also endured big losses. The S&P BSE Midcap and Smallcap indices – gauging the two segments respectively – were down 10.59 per cent and 10.05 per cent.
Several states in India will remain under a lockdown till March 31, as the country has registered 341 cases of coronavirus, with seven deaths as of Sunday.
Investors are assessing the effectiveness of policy measures to curb the spread of the coronavirus outbreak amid fears that the world economy may enter into recession; expect more correction ahead, say analysts. (Also Read: Recovery Will Take A Long Time, Say Analysts)
“Investors at this point are panicking and waiting helplessly for more clarity on the coronavirus situation… Unless the markets stop falling, we will not know where the bottom lies,” Nithin Kamath, founder and CEO of brokerage Zerodha, told NDTV.
Monday’s trading halt was a second within a period of seven trading sessions, as world markets continued to suffer the worst selloff since the 2008-09 global financial crisis. The rapidly spreading virus has claimed more than 14,000 lives globally with more than 300,000 infections, disrupting business and ravaging markets worldwide.
Asian stock markets sank as a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 3.8 per cent, with New Zealand’s market shedding a record 10 per cent as the government closed all non-essential businesses. Shanghai blue chips dropped 2.3 per cent, though Japan’s Nikkei rose 0.8 per cent. E-Mini futures for the S&P 500 dived 5 per cent at the open to be limit down, while EUROSTOXXX 50 futures tumbled 6.4 per cent.
