Sensex sheds more than 900 points on virus alarm in India

New COVID-19 cases spur change in sentiment, resulting in over 1,500 declines

Updated - March 02, 2020 11:02 pm IST

Published - March 02, 2020 10:23 pm IST - MUMBAI

It was a volatile day at the stock markets on Monday with the benchmark Sensex falling more than 900 points from the day’s high, as reports of COVID-19 cases in India affected investor sentiment, even as most other leading Asian markets gained ground after the recent sell-off.

The 30-share Sensex, which lost more than 3,000 points in the previous six trading sessions, opened the day strong and surged nearly 800 points to touch a high of 39.083.17. It traded with significant gains for most part of the trading session before news poured in that two fresh COVID-19 cases had been detected in India. The news spooked investors and the benchmark Sensex fell to a low of 37,785.99, before closing at 38,144.02, down 153.27 points or 0.40%.

The broader Nifty settled the day at 11,132.75, down 69 points, or 0.62%. The India VIX index — a barometer for volatility — jumped nearly 8.5% to move further close to its 52-week high levels.

Nips pullback

“Detection of new cases of coronavirus in India has nipped the nascent pullback in the Indian equity market,” said Gaurav Dua, head, Capital Market Strategy & Investments, Sharekhan, adding that though the new developments were a worrying factor that could lead to further volatility in the short-term, the correction also offered a buying opportunity for investors.

On Monday, the Ministry of Health said that two individuals — one each in Delhi and Telangana — have tested positive for the virus after having returned from Italy and Dubai. The losses in the Indian market were in the midst of a pull-back rally in most other leading Asian bourses with Nikkei, Hang Seng and Kospi, all gaining ground on Monday.

In India, the reversal of sentiment was sudden with across-the-board selling, as the morning session saw less than 400 stocks losing ground, but as the session ended, there were more than 1,500 declines.

Foreign portfolio investors continued to sell Indian equities, with Monday’s net sales pegged at nearly ₹1,355 crore, even as their domestic counterparts attempted to provide some support with net purchases of ₹1,139 crore. In the Sensex pack, stocks such as Axis Bank, Bajaj Finance, State Bank of India, ONGC, Tata Steel, NTPC and Tata Steel lost more than 2% each.

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