Spooked investors move to cash amid market turmoil
The increased volatility in financial markets this week has pushed investors to seek safety in cash, according to analysts at the Bank of America.
Reuters reports on the development: "Investors stormed out of bonds, equities and every other major asset class and piled into cash in a wild week for markets that saw trillions of dollars wiped out amid rising recession fears due to the coronavirus pandemic, BofA said on Friday.
Analysts at BofA, parsing weekly data from flow tracking specialist EPFR, said cash saw $136.9 billion of inflows, the largest ever. Investors withdrew a record $25.9 billion from bond funds in the week to Wednesday."
Nifty, Sensex end volatile trading session
The benchmark indices ended the day up around 4%. They were down close to 11% at their intra-day low point before rallying to record their biggest recovery in history.
The Sensex ended the day up over 1,300 points points after being down over 3,000 points in the morning. The Nifty closed above the 10,000 mark and the Sensex closed above 34,000.
Bitcoin lost 60% of its value this week
It looks like the popular cryptocurrency, touted as an alternative to national currencies, has not shown any immunity to the market crash this week.
Reuters reports: "In highly volatile trading, bitcoin fell over 20% to around $3,850 in overnight trading, its lowest since March last year, before clawing back some of its losses. It was last up 9% at $5,270.
On Thursday, bitcoin suffered its worst daily loss in nearly seven years, losing almost 40% as the rout of major stock markets over the economic impact of the coronavirus outbreak spread to cryptocurrencies.
Bitcoin has lost around 60% of its value since Saturday, underscoring its challenges in becoming a usable currency."
Economic slowdown, BS-VI transition take toll on automobile sector as sales go down 19.08%
Automobile sales in India across categories declined 19.08% in February as economic slowdown continued to hit demand, besides lower production in view of transition to BS-VI emission norms affecting wholesale dispatches, auto industry body SIAM said on Friday.
Vehicle sales across categories stood at 16,46,332 units last month as against 20,34,597 units in February 2019, according to data released by the Society of Indian Automobile Manufacturers (SIAM).
Sensex up 1,800 points after record fall
The benchmark stock indices have made an impressive recovery in the afternoon session, gaining well over 5%
The Nifty is back above the 10,000 level while the Sensex is above the 34,500 mark. As of now, the Sensex has gained over 1,800 points after being down over 3,000 points in the morning session.
The Nifty and the Sensex suffered a loss of close to 11% in the morning session, which saw trading halted after prices hit the lower circuit for the first time in 12 years.
RBI promises adequate liquidity for markets
Manojit Saha reports from Mumbai:
The Reserve Bank of India has said it will take steps to ensure adequate liquidity in the financial markets and the situation is being monitored closely.
The statement comes amid heightened volatility in the domestic and global financial markets. Trading was halted in domestic equities market after hitting lower circuit on Friday.
"The Reserve Bank of India is closely and continuously monitoring the rapidly evolving global situation and will take all necessary measures to ensure that money, debt and forex markets remain adequately liquid and stable, and continue to function normally," RBI said.
Data | Have falling crude oil prices affected petrol prices in the country?
The dynamic pricing of petrol has not resulted in a fall in retail prices commensurate with crude oil price crashes. Crude oil prices have fallen again lately, coinciding with an economic slowdown, but the high share of central excise duties have resulted in retail prices remaining relatively high.
Markets are pricing that India will not be able to contain coronavirus scare, says Nilesh Shah
Are markets falling because they foresee significant pain in India due to the coronavirus pandemic?
IANS reports: "The bloodbath seen at Dalal Street and markets across the globe has been driven by the fear of coronavirus and bearish sentiments may only get changed once there is comfort in the markets that the deadly virus will be cured, Nilesh Shah, MD, Kotak Mahindra Asset Management Company has said.
According to Shah unless a medical solution emerges, there is less likelihood of markets to settle down. “Lower oil prices, lower interest rates, higher liquidity and lower trade deficit with China will not be discounted by the market till such time there is a medical solution for coronavirus,” he said in a Concall over present developments."
Deadline to bid for Air India extended to April 30
PTI reports: "The government on Friday extended the deadline for submitting bids for buying 100 per cent stake in Air India till April 30. The deadline was originally set at March 17."
More on the reason behind the deadline extension: "While extending the date, the Department of Investment and Public Asset Management (DIPAM) in a notification said the changes are in view of the requests received from the IBs (interested bidders) and the prevailing situation arising out of COVID-19."
It is worth noting that Indigo yesterday warned of falling demand due to the coronavirus pandemic having a "material impact" on its March quarter earnings . Airline shares have been hit hard during the current market rout.
Rupee bounces back above 74
The rupee that crashed to a record low of 74.5075 against the dollar this morning amid the turmoil in stock has bounced back strongly.
Reuters notes: "The rupee, which earlier fell to a record low of 74.508 against the dollar, reversed losses to trade 0.48% stronger at 73.985."
2020 market crash on a long-term chart
Monitoring margin and settlement positions: SEBI
Ashish Rukhaiyarreports from Mumbai:
The Securities and Exchange Board of India (SEBI) said it is is closely monitoring the developments in the Indian stock market and, along with the stock exchanges, is prepared to act suitably if required.
Soon after the market side circuit breakers were hit around 9:20 AM leading to a trading halt for 45 minutes, the capital market watchdog said that while the fall in the Indian markets is in line with that in many other global markets, it is monitoring margin and settlement related situation closely.
"The positions of margin payments, margin utilization, adequacy of collaterals (securities deposited by the brokers with the clearing corporations) and the pay-in’s obligations being met by the clearing members (brokers) are being continuously monitored," stated a release by SEBI.
"Similarly, the settlement and clearance of trades are also being constantly monitored. SEBI and Stock Exchanges are prepared to take suitable actions as may be required," it added.
Nifty, Sensex recoup losses as trading resumes
The Nifty is currently trading above the 9,600 mark and Sensex is trading close to the 33,000 mark.
Both indices are slightly in the green, recovering from losses of up to 11% during the second pre-open session of the day.
Trading was earlier halted after the Nifty dropped by 10% to hit the lower circuit.
Ashish Rukhaiyar further notes: " The India VIX index jumped more than 28%. Around 1,300 stocks were in the red, as against 465 gainers. In the first hour of the trading session, there were less than 90 gainers."
Markets to reopen for normal trading at 10:20 AM
Stocks will be allowed to trade normally once again at 10:20 AM. The pre-open session is set to begin at 10:05 AM.
Trading was halted earlier this morning as the Nifty dropped 10% to hit the lower circuit breaker as investors rushed for the exit. The Sensex was down 9.43%
Ashish Rukhaiyar offers more inputs on circuit breakers : "Circuit breakers get triggered when the benchmark indices hit pre-defined limits. If the benchmark Sensex or Nifty fall or rise more than 10% before 1:00 PM, then trading is suspended for 45 minutes.
If the limit is hit between 1:00 PM and 2:30pm, then trading is halted for 15 minutes. In an instance, wherein the circuits are hit after 2:30pm, then there is no trading halt."
Gold set for worst weekly loss in 7 years
Gold, considered a safe haven asset in times of financial turmoil, hasn't been spared by the market rout as the metal is set to end the week with its worst weekly loss in nearly 7 years.
Reuters reports: "Gold prices extended losses on Friday and were set for their steepest weekly decline in nearly seven years as traders sold bullion to finance margin calls in other assets hammered by panic over the coronavirus.
Spot gold was down 0.9% at $1,563.45 per ounce by 0320 GMT, and was on track for a weekly decline of 6.6% - the most since June 2013. The metal slid as much as 4.5% on Thursday."
Stocks have hit lower circuit after 12 years
Ashish Rukhaiyar from Mumbai notes : "This is the first time in 12 years that Indian markets have hit the lower circuit.
The 30-share Sensex plunged 3,090.62 points or 9.43% to touch 29,687.52 before trading was suspended.
As many as 17 stocks in the Sensex lost more than 10% in the first few minutes of the trading session on Friday."
Rupee falls to record low
As investors rush toward safer assets such as the dollar and bonds amid , the rupee has taken a heavy beating.
PTI reports: "The partially convertible rupee dropped to a record low of 74.5075 against the dollar before recovering slightly to trade at 74.4445 by 0355 GMT.
Traders expect the central bank to step in to prevent further sharp falls in the currency but don't see it protecting the rupee at any particular level."
Stocks enter bear market
The Nifty and the Sensex opened to another day of huge losses with both indices down 10% in the initial half hour of trading. Trading has been stopped for the next 45 minutes as the Nifty hit lower circuit.
The crash in Indian stocks is in line with the fall witnessed in global stocks.
The Sensex dropped below the 30,000 mark this morning while the Nifty is currently trading well below the 9,000 mark.
The Indian stock indices are down around 30% from their January peak, marking the beginning of a bear market as the coronavirus pandemic spooks markets.
World stocks plunge into bear market, oil slumps
Global stocks plunged into a bear market and oil slumped further on Thursday after stimulus efforts from the European Central Bank failed to calm investors alarmed by U.S. moves overnight to restrict travel from Europe over the spread of COVID-19.
Trading was halted for 15 minutes shortly after the open in New York after the S&P 500 index fell more than 7%. It was recently trading down 8.20%.
