An “end of the world” syndrome gripped the stock market on Monday, and currency shared the panic. The key indices saw the biggest single day fall in the history even as the Rupee touched a new low, breaching 76 levels for the first time on intra-day basis.
The BSE benchmark Sensex sunk 3,935 points or 13. 15 per cent to close at 25,981.24; while the NSE Nifty cracked 1,135.20 points or 12.98% to settle at 7,610.25.
By all yardsticks, this was an unprecedented fall even considering the continuing sell-off in the global indices after the outbreak of the deadly coronavirus. While the Indian market crashed by nearly 13 per cent — Sensex shedding more than 4000 points one time — the Asian indices were lower by 3 to 7 per cent and Europe traded in the same range. It was obvious that the foreign investors were dumping Indian stocks without considering the relatively cheaper valuations.
The absence of any fiscal stimulus by the Government has accented the freefall in the India market, which has come down by nearly 40 per cent from its peak. The banking sector has seen the biggest sell-off amid fear of rising NPA in the coming quarters due to the “lockdown”. Take the case of a company like Axis Bank. The share plummeted by as much 29 per cent in a single day, before registering a symbolic recovery. The stock closed at Rs 308, compared to Rs 760 it reached six weeks ago.
SBI, ICICI bank, Indusind Bank and HDFC Bank suffered the same carnage. Reliance Industry, Bajaj Finance, Maruti and L&T tanked by more than 10 per cent.
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.
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. 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.
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.