Treacherous Thursday followed Manic Monday as investors — spooked largely by fears linked to the coronavirus pandemic — clobbered stocks, shredded the rupee and torched crude oil prices.
Investors scurried for cover with little prospect of finding a safe haven untouched by the avalanche of selling.
The Indian bourses saw over Rs 11 trillion worth of investor wealth wiped out on a day of frenetic trading amid mounting concerns about the state of the world economy and the ability of governments to deal with a snowballing crisis.
The 30-share Sensex opened at 34,472.50, over 1,200 points lower than Wednesday’s close, and quickly went into a free fall, plunging over 3,204 points to an intra-day low of 32,493.10. The benchmark index closed 2,919.26 points, or 8.18 per cent, lower at 32,778.14 — the largest-ever one-day plunge.
The Nifty crashed 8.3 per cent to 9,590.15, its lowest close in two-and-a-half years. On Monday, the Nifty had closed 4.90 per cent down while the Sensex had tumbled 5.17 per cent.
On Thursday, State Bank of India was the biggest loser as it tumbled 13.2 per cent, followed by ONGC, Axis Bank and ITC. Top private-sector lender HDFC Bank Ltd caused the biggest damage to the indexes, diving 8.18 per cent to its lowest close in more than a year.
On the inter-bank forex market, the rupee slid by 54 paise to a new 17-month low at 74.22 against the US dollar while the yield on the benchmark 10-year bond ticked up to 6.21 per cent.
Brent crude oil futures dropped 5.5 per cent to $ 33.82 per barrel.
President Donald Trump’s decision to suspend travel from Europe to the US for 30 days in an effort to stop the spread of the coronavirus sent the Dow Jones Industrial Average plunging 1465 points on Wednesday.
Indian investors took their cues from global markets that went into a tailspin after the meltdown in the US. But they were also grappling with the widening fallout from Yes Bank’s debacle that exacerbated fears of a cash crunch for corporate groups as banks start to turn off the funding taps to protect themselves from the scourge of rising bad loans.
Investor panic has increased pressure on the finance ministry and the RBI to devise measures to buoy sentiment with experts remaining sceptical about the monetary and fiscal authorities’ ability to devise a package that would help stem the slide.
“The Indian markets fell more than the other Asian markets today,” said Deepak Jasani, head of retail research, HDFC securities.
“This could reflect higher selling by foreign portfolio investors.”
“The risk of a global recession is rising and the markets do not seem to be pricing that in fully,’’ Jasani added, suggesting that there could be more pain in the days ahead.
