New Delhi: World Health Organisation (WHO) declared the coronavirus outbreak a pandemic thus triggering travel bans globally, and sending shock waves across financial and commodity markets.
Soon after the announcement, Nifty50 officially entered into the ‘bear market’, falling over 20 percent from the recent high. The sell-off gathered pace as the session progressed.
The 30-pack Sensex tanked 2,707 points to 32,990, its biggest-ever fall in absolute terms. Nifty slipped below 760 points and was trading below 9,700. Stock investors lost Rs 10.98 lakh crore worth of wealth. Panic was seen across-the-board with none of the sectoral index trading in the green. Smallcap indices tanked up to 11 percent.
Aviation stocks were the worst hit. Shares of aviation majors including InterGlobe Aviation and Spicejet tanked up to 19 percent after the government imposed stringent travel curbs to the country.
SpiceJet plunged 18.80 percent to Rs 49 while Interglobe Aviation slipped 10 percent to Rs 1,039.95.
“There is news flow going either way and people are really spooked. So, you will have to just wait it out. Hopefully, we will find a bottom somewhere here,” said Santosh Rao at Manhattan Venture Partners.
Just 126 of 1,700 active stocks on BSE traded higher. Nifty stocks plunged up to 11 percent, with Tata Motors falling 11.92 percent to Rs 88.10. YES Bank tanks 9.2 percent to Rs 26.15. Tata Steel, Adani Ports, Vedanta, and JSW Steel declined 8-9 percent.
Rao said that it is going to be a traders’ market. “We are in the deep end of the pool. It is not for the faint of heart. We really have to wait it out and let the dust settle”
Brent crude was trading down $1.03, or 2.9 percent, at $$34.76 a barrel. The sentiment was also hit after the US banned travel from Europe for 30 days.
The rupee fell 64 paise down at 74.28 against the US dollar after the global financial market meltdown signaled that the world is staring at a coronavirus-led economic recession. Data showed FPIs have pulled Rs 29,261.63 crores worth of domestic stocks in the last 11 consecutive sessions.
US stock market
US S&P 500 futures dropped more than 3 percent, a day after the S&P 500 lost 4.89 percent, putting the index in the bear market territory, the first time since the 2008 financial crisis, ending its longstanding bull run.
Japanese stock market
Japanese stocks have also entered the bear market territory. The benchmark Nikkei average sank 5.2 percent to 18,412.24 points by the midday break, its lowest level since April 2017, to fall into the bear market territory
A ‘bear market’ is a condition during which security or index plunges more than 20 percent from a recent high. This typically signifies a massive sell-off in the market.