Sensex regains 40,000-mark during intraday trade, Nifty above 11,700; Ultra Cement, SBI, HCL Tech in green

  • After starting over 393.03 points lower, the Sensex pared some losses to trade 201.94 points, or 0.50 percent, down at 40,079.26

  • Top losers in the Sensex pack included Sun Pharma, Bharti Airtel, Tata Steel, Reliance Industries and HDFC shedding up to 2 percent

  • The rupee appreciated 11 paise to 71.74 against US dollar in the morning session.

The Sensex briefly touch the 40,000-mark during intraday trade. The Nifty is 52.30 points at 11,745.60

In the opening session, Sensex plunged nearly 400 points in opening session on Wednesday tracking losses in index-heavyweights RIL, HDFC twins and ICICI Bank amid heavy foreign fund outflow and weak global cues.

After starting over 393.03 points lower, the 30-share index pared some losses to trade 201.94 points, or 0.50 percent, down at 40,079.26.

Similarly, the NSE Nifty dropped 58.10 points, or 0.49 percent, at 11,739.80.

Top losers in the Sensex pack included Sun Pharma, Bharti Airtel, Tata Steel, Reliance Industries and HDFC shedding up to 2 percent.

On the other hand, HUL, Nestle India, PowerGrid and Asian Paints were trading with gains.

In the previous session, the Sensex settled 82.03 points, or 0.20 percent, lower at 40,281.20, and the Nifty declined 31.50 points or 0.27 percent to end at 11,797.90.

According to traders, besides weak cues from global markets amid rising concerns over coronavirus outbreak beyond China, heavy foreign fund outflow too weighed on market sentiment here, a PTI report said.

On a net basis, foreign institutional investors (FPIs) sold equities worth Rs 2,315.07 crore, while domestic institutional investors bought shares worth Rs 1,565.28 crore on Wednesday, data available with stock exchanges showed.

 Sensex regains 40,000-mark during intraday trade, Nifty above 11,700; Ultra Cement, SBI, HCL Tech in green

Representational image. Reuters

Stock exchanges in Hong Kong, Seoul and Tokyo were trading with losses, while bourses in Shanghai turned positive.

Equities on Wall Street plunged in overnight trade after American health authorities said they ultimately expect the novel coronavirus to spread in the United States and are urging local governments, businesses, and schools to develop plans like cancelling mass gatherings or switching to teleworking.

Brent crude oil futures rose 0.50 percent to USD 54.53 per barrel.

Rupee up

Rupee appreciated 11 paise to 71.74 against US dollar in the morning session.

At the interbank foreign exchange the rupee opened at 71.76 and touched a high of 71.74, registering a rise of 11 paise over its previous close.

On Tuesday, the rupee had settled for the day at 71.85 against the US dollar.

The domestic unit, however, could not hold on to the gains and was trading at 71.78 against the dollar at 1002 hrs.

Meanwhile, investor sentiment remained fragile amid concerns over the impact of coronavirus outbreak on global economy, forex traders said.

The death toll in China's novel coronavirus epidemic on Wednesday climbed to 2,715 with 52 new fatalities while the confirmed cases rose to 78,064.

Rising crude oil prices and strengthening of the American currency vis-a-vis other currencies overseas weighed on the rupee, traders said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.13 percent to 99.09.

The 10-year government bond yield was at 6.32 percent in morning trade.

Asian shares slump, bonds rally as virus fears grow

Asian shares fell on Wednesday as a US warning to Americans to prepare for the possibility of a coronavirus pandemic drove another Wall Street tumble and pushed yields on safe-haven Treasuries to record lows, according to Reuters.

The S&P 500 and the Dow Jones Industrial Average both shed more than 3 percent on Tuesday in their fourth straight session of losses.

That led MSCI’s broadest index of Asia-Pacific shares outside Japan down 1.28 percent. Japan was among the worst-performing market in the region, weighed by growing concerns the virus could cancel the Tokyo Olympics.

Yields on 10-year and 30-year U.S. Treasuries teetered near record lows and gold rose as worries about the economic impact of the virus outbreak boosted safe-haven assets.

The World Health Organization says the epidemic has peaked in China, but concern that its spread is accelerating in other countries is likely to keep investors on edge.

“What we are seeing is share markets are playing catch up,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney. "Other asset markets have been flashing warning signs for weeks. A corrective bounce in equities is possible, but we still have a lot of downward momentum.”

Chinese shares fell 1.3 percent. Shares in South Korea, which has been rattled by a sudden rise in virus infections, briefly hit a two-month low.

While the stock rout has been global, the recent pace of selling in Asia has not been as severe as it has on Wall Street, which has been hit hard by the escalation of virus cases outside of Asia.

The S&P 500 lost $2.14 trillion in market capitalization over the last four sessions, according to S&P Dow Jones Indices analyst Howard Silverblatt.

US stock futures ESc1 rose 0.2 percent in Asia on Wednesday, but that did little to brighten the mood.

Adding to recent fears was an alert from the U.S. Centers for Disease Control and Prevention on Tuesday warning Americans to prepare for the spread of coronavirus in the United States, signaling a change in tone for the Atlanta-based US health agency.

The virus has claimed almost 3,000 lives in mainland China but has spread to dozens of other countries. Of increasing concern to investors, however, in the rising death toll in other countries.

Drastic travel restrictions slammed the brakes on China’s manufacturing and consumer spending, and there are worries other countries will face similar disruptions.

The virus has also hit Japan’s stocks hard on rising worries it could lead to cancellation of the 2020 Summer Olympics scheduled to start in Tokyo in July.

Japan's Nikkei stock index slid 1.1 percent, while shares of Japan's Dentsu Group Inc, an advertising agency deeply involved in the planning and operation of the games, fell to a seven-year low on Wednesday.

Shares of sportswear makers and other companies related to the Olympics have also fallen recently.

The yield on benchmark 10-year Treasury notes traded at 1.3421 percent on Wednesday in Asia, close to a record low of 1.3070 percent. The 30-year yield stood at 1.8142 percent, above a record low of 1.7860 percent.

The decline in yields weighed on the dollar. The greenback was last quoted at 110.25 yen, continuing a pullback from a 10-month high of 112.23 yen.

The dollar traded at $1.0872 per euro, off an almost three-year high of $1.0778 reached on 20 February.

Spot gold rose 0.53 percent to $1,643.75 per ounce as investors sought safe havens.

Oil prices recovered some recent losses in Asia, but there are lingering concerns that expected output cuts by major oil producers will not be enough to offset a decline in global energy demand caused by the virus.

US crude CLc1 ticked up 0.96 percent to $50.38 a barrel. Brent crude LCOc1 rose 0.78 percent to $55.38 per barrel. The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, have been sending signals that they will cut output further.

However, oil could come under more pressure as weekly U.S. supply reports due later on Wednesday are expected to show a rise in inventories, according to a Reuters poll.

--With inputs from agencies

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Updated Date: Feb 26, 2020 14:12:25 IST