THE Indian stock market suffered worst-ever single-day crash on Monday, with the benchmark indices plunging as much as 13.15 per cent, as panicked investors remained in sell-off mode amid lockdowns in several States in the country due to mounting coronavirus cases. The BSE benchmark Sensex plummeted 3,935 points or 13. 15 per cent to close at 25,981.24; while the NSE barometer Nifty cracked 1,135.20 points or 12.98 per cent to settle at 7,610.25.
On the currency front, the Indian rupee plunged below the 76-level (intra-day) for the first time. In the very first hour of trade on Monday, trading on the BSE and the NSE had to be halted after the benchmark indices – Sensex and Nifty – hit the 10 per cent lower circuit breaker. As trading resumed after a 45-minute freeze, losses widened on bourses due to unabated sell-offs across sectors. Global stocks too roiled after nations across the world announced lockdowns in an effort to mitigate the spread of COVID-19 pandemic, spiking fears of a mammoth global recession. On the Sensex chart, Axis Bank was the top loser, tanking over 28 per cent, followed by Bajaj Finance, IndusInd Bank, ICICI Bank, Maruti and L&T. All sectoral indices ended significantly lower, with BSE bankex, finance, capital goods, basic materials, industrials and auto indices plunging up to 16.82 per cent.
Broader midcap and smallcap indices tanked over 12 per cent each. “With the spread of COVID-19 continuing unabated and the fears of global recession increasing, the Indian markets crashed. The markets closed much lower in percentage terms compared to the Asian and European markets, which indicated increased uncertainty regarding the spread of the virus in India after the Government indicated that the country was in a crucial phase in its fight against the virus,” Vinod Nair, Head of Research at Geojit Financial Services, said. Further measures and lockdowns are expected after manufacturing companies indicated that they would shut down their facilities, which would have an overall impact on business activity and market confidence, he added.
The Central and State Governments on Sunday announced lockdown in about 80 districts in the country where at least one confirmed case of COVID-19 was reported. The districts where lockdown was announced include 10 districts each in Maharashtra and Kerala, six districts each in Uttar Pradesh and Gujarat, five each in Karnataka and Haryana, three each in Tamil Nadu and Punjab. Meanwhile, S&P Global Ratings on Monday cut its estimate for India’s GDP growth for the next fiscal to 5.2 per cent from its earlier estimate of 6.5 per cent, which further worsened the market sentiment that has been already reeling under the coronavirus spread. In the global market, bourses in China, Hong Kong and South Korea plunged up to 5 per cent, while those in Japan ended on a positive note. Bourses in Europe sank up to 4 per cent. Meanwhile, Brent crude oil futures dropped 5.30 per cent to USD 25.55 per barrel.
The number of global COVID-19 infections has shot past 3,00,000. Worldwide fatalities topped 14,000. Cases in India spiked to 468, according to Health Ministry log.
Rupee plummets by 102 paise to all time low of 76.22 against dollar
THE rupee on Monday tumbled by 102 paise to settle at a lifetime low of 76.22 (provisional) against the US dollar as domestic equities came under pressure following a sharp surge in coronavirus cases in India. Forex traders said that market participants are concerned that the sharp rise in coronavirus cases, which has crossed over 400 in the country, could weigh on the economy. The rupee which opened on a weak note at 75.90 at the interbank forex market, finally settled at 76.22 against the US dollar, registering a decline of over 102 paise over its last close. During the day it saw a high of 75.86 and a low of 76.30.
The local unit had settled at 75.20 against the US dollar on Friday. COVID-19 cases in India has increased to 415, according to the Union Health Ministry. “The currency has been weighed down in the last few sessions also due to broad strength in the dollar against its major crosses. On the domestic front, FIIs continued to remain net sellers in the equity and debt segment and selling has been to the tune of over USD 11 billion,” said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services.