Indian stocks plunge on global cues, virus fears

Dubai - The benchmark Sensex lost 1,448 points in a broad based sell-off which saw none except FMCG major ITC withstanding the carnage.

The sharp reactions to bearish cues were evident as global indices unleashed fear and panic and investors resorted to heavy selling on Friday over the spread of coronavirus.
The Indian stock markets followed global stocks which are headed for their worst week since 2008 financial crisis as the world found itself on the cusp of a pandemic. Minutes before the closing bell, the Sensex was trading nearly 1,500 points lower with none of its 30 constituent stocks withstanding the carnage. At 3.25pm, the Sensex was trading lower by 1,394.67 points or 3.51 per cent at 38,350.99 while the broader Nifty slipped 423 points or 3.64 per cent 11,210.30.
The benchmark Sensex lost 1,448 points in a broad based sell-off which saw none except FMCG major ITC withstanding the carnage.
The 'Fear Index' or volatility index jumped by 30 per cent to settle at 22.87 as fresh cases of coronavirus infection surged outside China.
Nifty Metal index plummeted 7 per cent, the most among the 11 Nifty sectoral indices. It was followed by IT, media and PSU Bank index. The pivotal - banking and financial service sectors index - closed over 3 per cent lower.
MR Raghu, managing director of Marmore Mena Intelligence, said: "Global meltdown is playing havoc with emerging markets. Since China is the global supply chain nerve center, market participants are unable to price the impact. Hence the mass sell off. I feel the bearish trend will continue for some more time,"
Relentless selling across stock markets comes as the number of coronavirus infection cases jumped even outside China, the epicentre of the outbreak.
Wall Street's benchmark index, Dow Jones Industrial Average closed (down 4 per cent) with record losses on Thursday.
The top losers in the Indian markets were Tech Mahindra, Tata Steel, Bajaj Finance, Mahindra and Mahindra followed by HCL Tech and SBI.
The biggest negative contributors of the decline in Sensex was Reliance Industries.
"The Indian markets has seen a big sell off in line with the major correction that are being witnessed in the global markets and in particular the US Markets. As far of the Indian markets are concerned we expect that the markets should soon recover in the next few weeks. India comparably appears to be insulated from the corona virus panademic and in the near term there is a good possibility that corporate India and businesses will benefit during this trade disruption phase from China," said Krishnan Ramachandran, CEO, Barjeel Geojit Securities.
The Friday's trading brought down Sensex by 3.6 per cent and its counterpart Nifty by 3.7 per cent. Losses were all across the board but segments which were hammered most were metals, public sector banks, financial services and IT services. Major stocks such as RIL & HDFC declined by over 4 per cent, tech majors - Infy & TCS were down by over 5 per cent, global manufactures such as Tata Steel down by 7.5 per cent and Tata Motors by 11.2 per cent.
Flight of capital was evident on Indian markets as global investors reacted sharply to US market touching its lowest ebb since 2008 Financial crisis. Foreign Institutional Investors (FIIs) hit panic button leading to major selloff in Indian markets.
Nishant Srivastava, director, Viksa Market Insights, said: "Sensex continued its descend this week on cues of global economic slowdown with a major jolt on Friday, when the index crashed 1,448 points. Alarmed by spread of Corona virus in major Asian economies and its subsequent impact on global giants listed across Atlantic, investors were struck with pandemic fear across the globe."
Santosh Meena, Senior Analyst, TradingBells said that the brutal fall on Dalal Street is reflecting the tension in global markets amid rising worries over the virus which has an overall toll of 2,788.
The momentum of new cases in China is coming down but the number of cases outside China are rising sharply.China's Shanghai SE Composite Index was trading 3.71 per cent lower while Japan's Topix tumbled 3.6 per cent. Hong Kong's Hang Seng plummeted over 3 per cent.
Besides, the futures markets pointed at no near-term relief for the global markets. FTSE 100 Index Futures pointed at a rough start. The index was down 3.44 per cent, NASDAQ 100 Future also traded lower by 1.29 per cent.
Equity markets are falling sharply as fear of recession is rising where investors are looking for safe-haven instruments like Yen, US bonds and Gold, Meena said.
"It is still difficult to predict the extent and impact of coronavirus but the equity markets are in critical condition and they are looking for some positive triggers on the front of coronavirus for any kind of respite," Meena added.
The coronavirus (COVID-19) outbreak is likely to be declared a pandemic and focus is now shifting from China to South Korea, Iran, Italy and Japan -- where cases are escalating fast, even Germany, Brazil and several others have joined the list, a new report said on Friday.
The World Health Organization (WHO) has said that the coronavirus outbreak has reached a "decisive point" and has "pandemic potential" as the toll in China, the deadly disease's country of origin, increased to 2,788 on Friday.
"We are at a decisive point... For the past two days, the number of new cases reported in the rest of the world has exceeded the number of new cases in China," WHO chief Tedros Adhanom Ghebreyesus said.
The number of coronavirus cases in South Korea increased to 2,022 on Friday. Italy has confirmed 122 more coronavirus cases, bringing the total number of confirmed cases to 650. - with inputs from IANS - sandhya@khaleejtimes.com