MUMBAI: In its steepest one-day crash in history (in absolute terms), the sensex plunged 2,919 points on Thursday – outstripping its previous worst loss of 1,942 points on Monday by over a thousand points – to close at 32,778 after a bloodbath on global stock markets with the WHO declaring coronavirus a pandemic, triggering fears of a recession.
A nerve-wracking trading session saw the market entering bear territory, with a 20% plunge from its all-time high of 42,274 on January 20. It also hit a two-year low of 32,493 intra-day.
In four sessions this week, the sensex has lost nearly 4,800 points, or 12.7%. And if early trends on Wall Street are anything to go by, Friday’s session is unlikely to bring any respite to Dalal Street investors as both Dow Jones and S&P500 tanked over 7% when trading opened, triggering a 15-minute halt in the US markets.
The day’s session in India witnessed about 1,200 stocks, including RIL, TCS and SBI, hitting their 52-week low levels. As a result, investors were left poorer by a record Rs 11.4 lakh crore with BSE’s market capitalisation now at Rs 125 lakh crore. From a high of Rs 160 lakh crore on January 17 this year, investors have lost Rs 35 lakh crore in 39 trading sessions.
In late trades on Thursday, the sensex fell to a low of 32,493, a slide of 3,204 points or 9% intra-day, while the Nifty crashed 950 points, or 9%, to 9,508 points, its lowest level since May 2017. Both the indices were close to hitting the 10% lower circuit limit. India VIX, a measure of volatility, was also at an elevated level of 30.4%.
All the 30 sensex stocks, 50 Nifty stocks and sectoral indices on the BSE closed in the red, a rare happening, market players said.
Most PSU banks witnessed heavy selling led by SBI. Investors were also jittery because of the continuous selling by foreign investors who have taken out over Rs 26,500 crore (about $3.5 billion) from the Indian stock market in March as global fund managers are looking to be either in cash or in safer investments like gold and US treasuries.
Relentless selling by foreign portfolio investors has been impacting the strength of the rupee, which on Thursday closed 58 paise weaker at 74.22 against the dollar, near its all-time low.
Late evening, SGX Nifty, the futures index on the Nifty that is traded on the Singapore bourse, was down more than 6% to below 8,900. If global markets do not recover, there could be more pain for Indian stocks on Friday, the 13th.
According to Siddhartha Khemka of Motilal Oswal Financial Services, global markets fell sharply after WHO declared coronavirus a pandemic. “Bloodbath was seen across the globe and our market got scorched by this firestorm. Coronavirus has now reached 122 countries and with fresh travel bans and lockdowns across nations, it has heightened fears of a global economic recession and created panic.
There is also fear that the other countries would soon join Italy and Iran, which are now on the frontline of the disease,” he said. “Markets may not recover in a hurry and any bounce could be sold into.”
Indian equity benchmarks suffered their biggest ever one-day plunge to crash into bear territory on Thursday as the coronavirus pandemic left a trail of red across global financial markets.
