NEW DELHI – Indian stock benchmark Sensex on Monday sank nearly 807 points, the second-biggest single-day fall this year, tracking sell-off in global markets as coronavirus cases rose exponentially outside China.
Starting off on a weaker note, the BSE gauge plunged to a day’s low of 40,306.36 after being caught in a panic selling as investors kept fretting over the reporting of a large number of new virus cases in South Korea, Italy and Iran.
The 30-share index finally settled at 40,363.23, dropping 806.89 points or 1.96 per cent — the second-biggest one-day fall in 2020. The Sensex had plunged over 987 points on February 1 this year — the day the Union Budget was presented.
While the broader NSE Nifty sank 251.45 points or 2.08 per cent to 11,829.40.
All Sensex components ended in the red, with Tata Steel cracking 6.39 per cent, followed by ONGC, Maruti, HDFC, Titan and ICICI Bank.
Sectorally, BSE metal index tumbled nearly 6 per cent, auto 3.39 per cent and telecom 3.33 per cent. All sectoral indices closed in the red.
In the broader market, BSE midcap and smallcap indices sank up to 1.60 per cent.
Globally, equities bore the brunt of worsening trading sentiment in the wake of rising virus cases on new regions other than China.
South Korea went on high alert on Sunday following a sharp jump in coronavirus cases, and Italy and Iran took their own drastic containment steps.
“Demand for safe-haven assets spiked as fresh coronavirus cases in South Korea and Italy indicated that business impact could be higher than thought earlier. The Trump-Modi meet is not providing clues to the market regarding trade deal but the market is hoping for some hint in the future,” Vinod Nair, Head of Research at Geojit Financial Services, said.
Further, the IMF also warned that the deadly epidemic could put an already fragile global economic recovery at risk.
Chinese President Xi Jinping on Sunday said the coronavirus epidemic is the country’s “largest public health emergency”. The death toll from the deadly virus climbed to 2,592 in China on Monday.
Seoul stocks ended in deep red after South Korea reported 161 more coronavirus cases on Monday, taking the overall virus cases to 763 and making it the world’s largest total outside China.
Bourses in Shanghai, Tokyo and Hong Kong also closed with significant losses.
Stock exchanges in Europe sank in opening trade with Milan’s FTSE MIB plunging over 4 per cent after Italy reported its fourth death from the virus as the number of people contracting the virus continued to mount.
Brent crude oil futures dropped over 4 per cent to USD 56.10 per barrel.
On the domestic front, investors were eyeing US President Donald Trump’s two-day visit to India for further cues on the trade front. He reached Ahmedabad earlier in the day.
On the currency front, the Indian rupee was down 30 paise to 71.94 per US dollar.
Indian markets, which were relatively resilient till now have also started pricing in the impact of economic loss due to the spread of coronavirus with a steep fall in equity markets, experts said.
Indian corporates are expected to witness disruption in the supply chain as the manufacturing activities in China slows down considerably, they added.
Stocks, oil prices tumble on pandemic fears, as gold soars
World stock markets and oil prices tumbled Monday, with Milan and Seoul falling hardest on growing fears of a coronavirus pandemic, as gold hit a seven-year peak on safe-haven buying, dealers said.
In late morning deals, Milan’s stock market dived almost five per cent following reports of a fourth death amid the COVID-19 epidemic, an 84-year old man in the northern Lombardy region.
It was the third death in Lombardy, where villages have been sealed off and security measures enforced to stem the spread of the disease.Traders’ screens were awash with red elsewhere in Europe too, with Frankfurt falling 3.7 per cent, London losing 3.5 per cent, Madrid down 3.3 per cent and Paris shedding 3.8 per cent.Brent oil prices slumped four per cent as the burgeoning crisis sparked global energy demand worries.
Conversely, on the London Bullion Market gold surged to USD 1,689.31 per ounce — a level last seen in January 2013 — as investors snapped up the precious metal as a safety measure amid the market turbulence.
“Fears over an escalation of the coronavirus outside of China have caused a major retreat in global markets and prompted wild swings in commodity prices,” said AJ Bell investment director Russ Mould.
“Italy’s lockdown, as the country tries to control the worst outbreak of the virus in Europe, has caused investors to panic about how business and society will be affected. A large spike in coronavirus cases in South Korea has also added to market concerns. “The result is a large sell-off in equities with… Europe and Asia deeply in the red,” Mould added. Seoul nosedived 3.9 per cent as South Korea announced a surge in COVID-19 infections, while Hong Kong erased 1.8 per cent but Shanghai retreated by only 0.3 per cent.
With the outbreak showing little sign of easing, investors are increasingly concerned it could have a much longer-term impact on the world economy.
Traders had been broadly optimistic that the virus — which has killed nearly 2,600 and infected 80,000 — was being contained outside China but a spurt of infections and deaths in other countries including South Korea, Italy and Iran has fanned fears of a global outbreak.