Markets on freefall: Sensex crashes over 3,100 points to 32,587; Nifty plunges 932 points at 9,526; ITC, Axis Bank, SBI, ONGC trade in red
Trump announced on Wednesday the United States will suspend all travel from Europe, except from the United Kingdom, to the United States for 30 days starting on Friday
The market continued to plunge with the Sensex nosediving 3,110 points or 8.71 percent to 32,587. 50
The Nifty was trading down at 932 points or 8.91 percent at 9526.45 around 2.40 PM
Global shares crumbled on Thursday after US President Donald Trump said the United States will suspend all travel from Europe as he unveiled measures to contain the coronavirus epidemic that has extracted a heavy human and economic toll worldwide
The market continued to plunge with the Sensex nosediving 3,110 points or 8.71 percent to 32,587. 50. The Nifty was trading down at 932 points or 8.91 percent at 9526.45 around 2.40 PM.
Investor wealth worth over Rs 8 lakh crore was wiped off in early trade on Thursday as equity markets crashed amid global equity selloff after World Health Organization termed the coronavirus outbreak a pandemic.
Indices fell sharply on Dalal Street in the opening session on Thursday. The Sensex plummetted 1,821.27 pts to 33,876.13 in opening session; Nifty plunged 470.35 points to 9,988.05.
After opening 34,472.50 points, Sensex dropped to 33,876.13. Meanwhile, Nifty tanked 470.35 pts to 9,988.05. Tata Steel, ONGC, State Bank of India (SBI) shares dipped over 8 percent while Reliance Industries fell over 7 percent. Global shares too crumbled after US President Donald Trump said America will suspend all travel from Europe as he unveiled measures to contain the coronavirus epidemic that has resulted in a heavy human and economic toll worldwide.
Sensex breached 34,000 level and slipped to the 17 months low on 12 March. All the Sensex stocks are trading in the red. Tata Motors was 11.11 percent down ,Tata Steel 8.35 percent, ONGC 7.89 pecent, SBI 7.08 percent and Axis Bank was down 6.91 percent.
#CNBCTV18Market | Dalal Street tumbles following global cues. #Nifty breaches 10,000-mark for the first time since March 26, 2018, trades at a 17-month low#Sensex hits 15-mth low#CoronavirusOutbreak pic.twitter.com/7kmgSdrQke
— CNBC-TV18 (@CNBCTV18Live) March 12, 2020
Continuing its downward spiral, domestic BSE Sensex sank 1,821.27 points at open. The 30-share index was trading 1,652.54 points, or 4.63 percent, lower at 34,044.86 in the morning session. Similarly, the NSE Nifty cracked 486.75 points, or 4.65 percent, to 9,971.65. In the previous session, the 30-share BSE barometer settled 62.45 points or 0.18 percent higher at 35,697.40, and the Nifty closed 6.95 points or 0.07 percent up at 10,458.40.
On a net basis, foreign institutional investors sold equities worth Rs 3,515.38 crore, while domestic institutional investors bought shares worth Rs 2,835.46 crore on Wednesday, data available with stock exchanges showed, according to PTI.
According to traders, volatility peaked in global markets after WHO's announcement describing the coronavirus outbreak as a pandemic. Besides selloff in global equities, massive plunge in international oil prices and depreciating rupee added to investor concerns, they added. Incessant foreign fund outflow also spooked market participants, traders said. Elsewhere in Asia, bourses in Shanghai dropped over 1.34 percent, Hong Kong 3.66 percent, Seoul 4.29 percent and Tokyo cracked up to 5.32 percent.
In overnight trade, US equity benckmarks also plunged nearly 5 percent, intensifying the global rout. The new coronavirus that first originated in the Chinese city of Wuhan in December last year has claimed over 4,200 lives and infected more than 117,330 people across 107 countries and territories.
China remains the hardest-hit with over 80,000 infections and 3,000 deaths.
Rupee plunges 82 paise against US dollar
The Indian rupee plunged 82 paise to 74.50 against US dollar in opening trade on Thursday after the World Health Organization declared the new coronavirus (COVID-19) a pandemic.
Forex traders said market participants turned jittery amid mounting fears of a coronavirus-led economic slowdown. Weak opening in domestic equities and foreign fund outflows too dragged the local unit, they added. The rupee opened at 74.25 at the interbank forex market and then fell further to 74.50, down 82 paise over its last close.
The local unit had settled at 73.68 against the US dollar on Wednesday. Though the weakening of the American currency in the overseas market and easing crude oil prices supported the rupee, traders believe there are mounting fears of recession in major economies due to the coronavirus outbreak. This could weigh on the local unit, they said.
World Health Organization (WHO), late Wednesday night, termed the new coronavirus outbreak as a pandemic, and expressed deep concern over the "alarming levels of inaction". Following the announcement, US President Donald Trump suspended all travel from Europe, excluding the UK, to the US for the next 30 days to stop the spread of the virus. Brent crude futures, the global oil benchmark, fell 5.53 percent to USD 33.81 per barrel.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they sold shares worth Rs 3,515.38 crore on Wednesday, as per provisional data. Domestic bourses opened on a negative note with benchmark index Sensex trading 1,672.61 points down at 34,009.81 and the broader Nifty plunging 469.50 points to 9,988.90.
The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.27 percent to 96.24. The 10-year government bond yield was at 6.19 percent in morning trade. COVID-19, which first originated in the Chinese city of Wuhan in December last year, has claimed over 4,200 lives and infected more than 117,330 people across 107 countries and territories.
Global shares crumble
Global shares crumbled on Thursday after US President Donald Trump said the United States will suspend all travel from Europe as he unveiled measures to contain the coronavirus epidemic that has extracted a heavy human and economic toll worldwide. US S&P500 futures more than 3 percent, a day after the S&P 500 lost 4.89 percent, putting the index in a bear market territory, defined as a 20 percent fall from a recent top.
Euro Stoxx 50 futures dived more than 5 percent to their lowest levels since mid-2016. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 2 percent to its lowest level since early 2019, while Japan’s Nikkei lost 3.3 percent.
Australia’s benchmark dived 3.7 percent while South Korea’s Kospi fell 2.7 percent to a four-year low.
Trump announced on Wednesday the United States will suspend all travel from Europe, except from the United Kingdom, to the United States for 30 days starting on Friday.
He also announced some other steps, including instructing the Treasury Department to defer tax payments for entities hit by the virus.
But investors were hardly convinced those measures will turn around the global economy as concerns grew that the number of infections could quickly snowball in many countries.
“In many European countries, the number of patients are increasing in a track similar to Italy. The US appears to be following that path. It now looks realistic to expect, within 10 days, those countries could have more than ten thousands patients.”
Safe-haven assets were back in favour, though many of them were still below recent peaks, which some market players suspect reflects a desperate bout of profit-taking to make up for losses suffered elsewhere.
Gold edged up 0.5 percent to $1,642.5 per ounce but still stood well below Monday’s high above $1,700.
The 10-year US Treasuries yield fell 8.7 basis points to 0.737 percent, though it is still more than 40 basis points above a record low of 0.318 percent touched on Monday. Some analysts say the rise could reflect worries about an increase in government spending for stimulus.
The two-year yield fell 4 basis points to 0.458 percent, but stood well above Monday’s low of 0.251%.
Fed fund rate futures, however, are still pricing in a rate cut of at least 0.75 percentage points and about a 50% chance of a 1.0 percentage point cut at a policy review on March 17-18.
“The initial reaction in financial markets shows that even after Trump spoke investors feel they need to avoid risk” said Junichi Ishikawa, senior currency strategist at IG Securities in Tokyo.
“Trump has outlined what he considered to be tough measures, but movements in stocks, stock futures, and currencies show that this is not enough to ease investors’ concerns. We are in a very difficult situation now.”
Oil prices extended losses as they were also hit by renewed weakness in the stock market and as Saudi Arabia and the United Arab Emirates announced plans to escalate the burgeoning price war.
US West Texas Intermediate (WTI) crude CLc1 last traded up slightly at $32.14 per barrel, down 2.5 percent.
In the currency market, the dollar slid against the safe-haven yen and the Swiss franc.
The US currency fell 0.7 percent to 103.64 yen and lost 0.5 percent to 0.9333 franc.
The euro traded at $1.1272, flirting with its lowest level in a week, ahead of the European Central Bank’s policy meeting later in the day.
The ECB is all but certain to unveil new stimulus measures, including new, ultra-cheap loans for banks to pass onto small and medium-sized firms.
Markets have priced in a 10 basis point cut to its already record-low minus 0.50% policy rate though many policymakers have said further cuts could be counterproductive because they hurt bank margins to the point of thwarting lending.
As per the Good Returns website, 10 grams of 22-carat gold is being bought and sold in Mumbai, and Kolkata at Rs 47,150
Revised Multi Commodity Exchange (MCX) data shows that gold futures which are set to mature on 5 August this year, slid 0.16 percent to Rs 50,902.00. Silver futures, which are set to mature on 5 July 2022 also observed a fall of 0.24 percent and settled at Rs 61,378.00.
In New Delhi and Kolkata, 10 grams of 22-carat gold is being bought and sold at Rs 47,780, as per the Good Returns website.