Sensex tumbles over 245 points, Nifty falls 75 points in opening deals in line with Asian peers; Rupee dips against dollar

  • Analysts said worries persist over rising death toll and the economic fallout from the novel coronavirus

  • The death toll from China's coronavirus epidemic climbed to 1,868 on Tuesday as 98 more people died while the total number of confirmed cases jumped to 72,436

  • Asian shares were also trading on a subdued note on Tuesday

The Sensex tumbled over 245 points to trade at 40,810 in openings deals on Tuesday on hectic selling by investors across sectors amid growing concerns over the economic impact of coronavirus epidemic.

The NSE gauge Nifty fell about 75 points to trade at 11,971 in early trade.

Analysts said worries persist over rising death toll and the economic fallout from the novel coronavirus.

The death toll from China's coronavirus epidemic climbed to 1,868 on Tuesday as 98 more people died while the total number of confirmed cases jumped to 72,436.

On Monday, the Sensex closed with losses of 202.05 points, or 0.49 percent, at 41,055.69. While the Nifty settled lower by 67.75 points or 0.56 percent at 12,045.80.

 Sensex tumbles over 245 points, Nifty falls 75 points in opening deals in line with Asian peers; Rupee dips against dollar

Representational image. Reuters.

Asian shares were also trading on a subdued note on Tuesday.

Meanwhile, the rupee opened 11 paise lower at 71.42 against the US dollar in opening trade on Tuesday.

Foreign institutional investors had sold equities worth Rs 374.06 crore on a net basis on Monday, according to provisional exchange data.

Rupee slips 10 paise to 71.42 against US dollar

The Indian rupee declined by 10 paise to 71.42 against the US dollar in opening trade on Tuesday as investor sentiments remain fragile amid coronavirus fears, a PTI report said.

Besides, foreign fund outflows, the stronger dollar against key global currencies and subdued equity market too put pressure on the domestic unit.

The rupee opened weak at 71.42 at the interbank forex market and then fell further to 71.42, down 10 paise over its last close.

The rupee had settled at 71.32 against the US dollar on Monday.

Meanwhile, Brent crude futures, the global oil benchmark, fell 1.13 percent to $57.02 per barrel.

Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they pulled out Rs 374.06 crore on Monday, as per provisional data.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.17 percent to 99.16.

The 10-year government bond yield was at 6.39 percent in the morning trade.

Equity market benchmark BSE Sensex tumbled over 245 points to trade at 40,810 in openings deals on Tuesday on hectic selling by investors across sectors amid growing concerns over the economic impact of coronavirus epidemic.

The NSE gauge Nifty fell about 75 points to trade at 11,971 in early trade.

Asian stocks fall after Apple warns on coronavirus impact

The warning from the most valuable company in the United States sobered investor optimism that economic stimulus by Beijing and other countries would protect the global economy from the effects of the epidemic.

S&P500 e-mini futures dipped as much as 0.3 percent in Asian trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.65 percent while Tokyo’s Nikkei slid 1.0 percent. Shanghai shares dipped 0.2 percent, having gained in nine of the past 10 sessions largely on hopes for policy support by Beijing.

China’s central bank cut the interest rate on its medium-term lending on Monday, which is expected to pave the way for a reduction in the benchmark loan prime rate on Thursday.

But the sentiment was shaken when Apple told investors its manufacturing facilities in China have begun to re-open but are ramping up more slowly than expected, reinforcing signs of a broader hit to businesses from the epidemic.

“Apple is saying its recovery could be delayed, which could mean the impact of the virus may go beyond the current quarter,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

“If Apple shares were traded cheaply, that might not matter much. But when they are trading at a record high, investors will be surely tempted to sell.”

Asian tech shares were also hit. Samsung Electronics dropped 2.1 percent, Taiwan Semiconductor Manufacturing Co (TSMC) lost 1.7 percent and Sony shed 2.6 percent.

In China, the number of new Covid-19 cases fell to 1,886 on Monday from 2,048 the day before. The World Health Organization cautioned on Monday, however, that “every scenario is still on the table” in terms of the epidemic’s evolution.

As China’s authorities try to prevent the spread of the disease, the economy is paying a heavy price. Some cities remained in lockdown, streets are deserted, and travel bans and quarantine orders are in place around the country, preventing migrant workers from getting back to their jobs.

Many factories have yet to re-open, disrupting supply chains in China and beyond, as highlighted by Apple.

“Lifting travel restrictions is taking longer than expected. Initially we thought lockdowns would end in February and factory output would normalise in March. But that is looking increasingly difficult,” said Ei Kaku, currency strategist at Nomura Securities.

Nomura downgraded its China first-quarter economic growth forecast to 3 percent, half the pace of the fourth quarter, from its previous forecast of 3.8 percent, and added there was a risk it could be even weaker.

Also hurting market sentiment was news that the Trump administration is considering changing U.S. regulations to allow it to block shipments of chips to Huawei Technologies from companies such as Taiwan’s TSMC, the world’s largest contract chipmaker.

Bonds were in demand, with the 10-year US Treasuries yield falling 1.0 basis point to 1.578 percent after a U.S. market holiday on Monday.

Safe-haven gold also rose 0.18 percent to $1,584.80 per ounce.

In the currency market, the yen ticked up 0.1 percent to 109.75 yen per dollar while the risk-sensitive Australian dollar lost 0.4 percent to $0.6707. The yuan was steadier for now, trading at 6.9866 yuan per dollar.

The euro, grappling with worries about sluggish growth in the eurozone, edged down 0.1% to $1.0836, near its 33-month low of $1.0817 touched on Monday.

Oil prices also dipped.

West Texas Intermediate (WTI) crude rose as high as $52.41 per barrel, before giving up gains to be $51.96 per barrel, down slightly on the day.

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Updated Date: Feb 18, 2020 10:28:04 IST


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