COVID-19 scare drags equities

ICICI Bank, HDFC among top losers in Sensex pack; Nifty down over 2%

Updated - February 24, 2020 11:05 pm IST

Published - February 24, 2020 10:18 pm IST - MUMBAI

Indian benchmark equity indices lost around 2% on Monday amid an overall weak trend in most markets, as investors remained jittery over concerns related to the global impact of coronavirus outbreak after South Korea reported a rise in the number of cases.

The 30-share Sensex, which opened lower compared to Friday’s close, traded in the red for the complete trading session on Monday before closing at 40,363.23, shedding 806.89 points or 1.96%. This was just a tad above the day’s low of 40,306.36.

The subdued sentiment could be further gauged from the fact that the Sensex pack saw all 30 stocks losing ground, with heavyweights like ICICI Bank, HDFC, Titan, Maruti Suzuki, ONGC and Tata Steel all losing more than 3% each on Monday.

The overall market breadth was also quite weak, with more than 1,700 stocks ending the day in the red, as against less than 750 gainers.

The broader Nifty lost a little over 2%, or 242.25 points, to close at 11,838.60. The India VIX index, which is considered to be a measure of short-term volatility, jumped nearly 26% in a single session on Monday.

Elsewere in Asia, Kospi of South Korea lost nearly 4% on Monday, while the benchmarks of Hong Kong, Taiwan and Indonesia among others lost over 1% each.

Investor sentiments hit

Domestic brokerage major IIFL, in a note to its clients, said that the Asian markets traded weak primarily on account of South Korea reporting a rise in the number of coronavirus cases, which was hurting investor sentiments, with equities bearing the maximum brunt.

“The number of cases in China are seeing a fall, however panic in markets is seeing selling exaggerate as investors turn cautious,” the note stated.

On Monday, South Korea’s Centers for Disease Control and Prevention confirmed an additional 70 cases of coronavirus even as some countries in the Middle East like Bahrain and Kuwait reported their first coronavirus cases.

“Globally equity markets are unnerved by the spread of coronavirus to countries beyond China and neighbouring countries to Middle East and Europe now,” said Gaurav Dua, Head - Capital Market Strategy & Investments, Sharekhan, adding that the growing risk aversion was clearly visible in the sudden spike in safe haven assets like gold.

Gold futures jumped more than 2%, or nearly $36 per ounce, on Monday with the precious metal trading at around $1,685 an ounce.

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