Tracking a crash in global equities after the coronavirus outbreak was termed a global pandemic by World Health Organization, Indian indices were hit today by another big selloff with Sensex registering its biggest one-day fall in absolute terms. The Sensex tanked 2919 points to 32,778 – its biggest one-day point fall. The Nifty also crashed 8% to 9,633.
The India VIX index, commonly referred to as the fear index,surged 30% to 41.32, indicating nervousness among investors. Broader marketsalso were witness to this mayhem. BSE midcap and smallcap index slumped about8% each.
Leading the slump were banking stocks, with Nifty Bank indextanking about 10%. Banking heavyweights like ICICI Bank, HDFC Bank, Axis Bankand SBI fell between 9% and 12%.
The Indian rupee (INR) today crashed to near a record lowagainst the US dollar in the backdrop of a global risk-off sentiment. The rupeetoday fell to as much as 74.34 per dollar to near its record low of 74.48, alevel hit in October 2018.
Stock markets tumbled across the globe and oil pricesslumped Thursday after President Donald Trump banned all travel from mainlandEurope to the United States for a month to fight the coronavirus pandemic,ramping up fears of worldwide recession.
Following an overnight slump, Sydney tumbled 7.4 percentThursday to suffer its worst session since the 2008 global financial crisis.
Tokyo closed down 4.4 percent, putting it in a bear marketafter slumping more than 20 percent from a recent high.
Hong Kong shed 3.7 percent, though Shanghai was off 1.5percent as China continues to see infection rates slow. Manila crashed nearly10 percent — sparking a brief trading halt — after it emerged PhilippinesPresident Rodrigo Duterte would undergo a precautionary test for the virus.
In the Gulf, Saudi dumped 3.0 percent in value, Dubaitumbled 8.0 percent and Qatar shed 4.5 percent.
The European Central Bank ramped up its super-cheap banklending programme, vowing to “support bank lending to those affected mostby the spread of the coronavirus, in particular small and medium-sizedenterprises”, as well as spend an additional 120 billion euros ($135billion euros) this year buying up government and corporate bonds.
On Wall Street, the stocks resumed their slide lower. TheDow tumbled 7.4 percent in the first minute of trading, having fallen 5.9percent on Wednesday.
“The crux of the matter … Is that all of the effortsbeing made to curtail the spread of the coronavirus are going to producenegative economic outcomes that will weigh far and wide on earnings prospectssince they are also curtailing consumer and business spending,” saidmarket analyst Patrick J. O’Hare at Briefing.Com – Massive negative signal.
“Travel restrictions equal slower global economicactivity, so if you need any more coaxing to sell… After a massively negativesignal from trading in US markets it just fell in your lap,” saidAxiCorp’s Stephen Innes.
The coronavirus market crash has wiped off $11.3 trillionfrom global valuations as of the end of Wednesday, according to HowardSilverblatt, a senior analyst at S&P Dow Jones Indices. The number ofcoronavirus cases across the globe has risen to more than 126,000 with 4,600deaths, according to Johns Hopkins University.
Elsewhere Thursday, oil prices were hammered, with benchmarkBrent North Sea crude losing more than seven percent, as the travelrestrictions will further dampen energy demand.
“We are now staring at the whole world going into alockdown,” Vandana Hari, of Vanda Insights, said. “Oil demand can beexpected to crash through the floor and all previous projections on oilconsumption are now out the door.” The oil market was already underpressure after Saudi Arabia and Gulf partner UAE stepped up a price war onWednesday by unveiling plans to flood global markets.
The Saudi move was the latest escalation of a fight amongoil producers after Russia balked at an OPEC-backed plan to cut production inresponse to lost demand because of the coronavirus.