Market mayhem: Sensex, Nifty log steepest ever one-day fall on recession fears

A stockbroker reacts as he watches the Bombay Stock Exchange (BSE) index on a trading terminal in Mumbai, India, Monday, March 9, 2020.   | Photo Credit: AP

The Indian benchmark Sensex witnessed on Monday its biggest single day fall in absolute terms amid a global sell off in equities on the back of rising concerns over the economic impact of the COVID-19 outbreak and a plunge in crude prices that further fuelled worries about a global slowdown.

The benchmark Sensex lost a whopping 1,941.67 points or 5.27% to close at 35,634.95 — a 52-week low for the barometer — with all its 30 constituents ending the day with huge losses.

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Incidentally, the Sensex has now lost 6,639 points or nearly 16% from its record intra-day high of 42,273.87 that was touched on January 20.

The broader Nifty plunged 538 points or 4.90% to close at 10,451.45.

More importantly, the India VIX index, considered a barometer of near-term volatility, jumped nearly 35% during intra-day trading to touch a new 52-week high of 34.4, before closing at 30.8 — 20.11% higher than Friday’s close.

“The Indian markets followed the global market meltdown which was triggered by rapidly spreading virus and free fall in crude oil prices,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

The global crude prices were in a free fall mode registering the biggest drop since the Gulf War in 1991.

After falling to an intra-day low of around $27 per barrel, crude was trading at around $33 a barrel level — nearly 20% lower than previous day’s price — around 8 pm.

The fall in crude prices was primarily on account of the all-out price war between Russia and Saudi Arabia. In the Sensex pack, the ONGC was the worst performer of the day, shedding over 16%.

This affected investor sentiments that are already down on account of the virus outbreak.

The dampened sentiments could be further gauged from the fact that trading at the NYSE had to be halted for 15 minutes as circuit breakers were triggered after the S&P 500 index had lost 7%.

“The relentless FPI selling in the last two weeks has added to the overall downtrend. There was panic globally as fears of rising cases of COVID-19 in countries like Italy and the U.S. made investors nervous. This has led to worries over a prolonged global economic slowdown,” said Mr. Khemka.

As per provisional numbers, foreign portfolio investors (FPIs) were net sellers at nearly ₹6,600 crore.

More than 2,200 stocks ended the day in the red as against only 327 gainers. In the Sensex pack, stocks like Reliance Industries, SBI, TCS, Tata Steel, Axis Bank and ICICI Bank all lost in the range of 5-13% each.

Shares of the State Bank of India plunged over 6% after it said it will pick up a 49% stake in Yes Bank for ₹2,450 crore.

Crisis-hit Yes Bank, on the other hand, rallied over 31%.

Most of the leading Asian indices also lost in the range of 4-6% each.

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Printable version | Jun 22, 2021 12:02:47 AM |

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