MUMBAI: The domestic equity market witnessed another day of bear hammering as risk was out of vogue and global markets continued to melt in the light of the relentless spread of coronavirus pandemic.BSE barometer Sensex dropped 2.01 per cent or 581 points to close at 28,288 on Thursday, while its NSE counterpart Nifty fell 2.35 per cent or 199 points to close at 8,270.Earlier in the day, the 30-share Sensex had declined as much as 7.46 per cent or 2,155 points to 26,714 while the 50-share Nifty had shed 7.51 per cent or 636 points to 7,833.The indices briefly entered the positive territory but could not hold on to the gains, tracking weakness in US stock futures.The rupee too slipped past the psychologically-important 75-mark against the US dollar.
At 3:30 pm, it was down 0.87 per cent at 75.10 against the greenback.Amid the uncertainty in the market, cash has emerged as king as all asset classes including gold have seen sharp falls.
Investors are racing to preserve their capital and are cashing out their investments.Stocks, bonds, gold and commodities have fallen in a secular selloff as the world struggles to contain coronavirus and investors and businesses scramble for hard cash.Till the time of writing this copy, India has registered three deaths and 169 positive cases.
Last week, the World Health Organisation (WHO) declared coronavirus as a pandemic.
Globally, more than 2,00,000 confirmed cases have been reported and nearly 9,000 people have lost their lives due to the disease.Unabated selling by foreign institutional investors (FIIs) has also weighed heavily on the domestic indices.
FIIs have sold a net of $4.9 billion of shares so far this month, and this may be the highest such selloff by the investor class ever.Markets at a glanceThe bears continued to be in control with more than three shares declining for every share than advanced on the BSE.
As many as 1,205 companies tested 52-week lows on the BSE.Volatility remained high on D-Street with India VIX rising 12.5 per cent to 71.95, its highest level since November 26, 2008.The broader market was equally badly hammered, with BSE 500 declining nearly 3 per cent.
BSE Midcap and BSE Smallcap dropped 3.70 per cent and 4.53 per cent respectively.All sectoral indices, barring BSE Telecom, closed lower.
BSE Metal index was the biggest loser and it shed 7.17 per cent.
Aluminum major Hindalco was the worst performer in the index as it dropped 9.56 per cent.A total of 22 Sensex stocks closed lower with Reliance Industries (RIL) and financials contributing the most to the indexs losses.Energy-to-telecom major RIL dropped 5.34 per cent, while private lenders ICICI Bank and Axis Bank shed 5.98 per cent and 9.50 per cent respectively.
Bajaj Finance nosedived 10.24 per cent.Mortgage lender Indiabulls Housing Finance eroded 34 per cent share value.Budget carrier IndiGos parent company InterGlobe Aviation dropped 4.56 per cent even as it said it will cut salaries of senior employees to tide over the crisis caused by coronavirus.Indian Railway Catering and Tourism Corporation (IRCTC) hit 5 per cent lower circuit as Indian Railways cancelled 155 trains due to low occupancy and coronavirus.Analysts viewsWith worries about a case of community spread of the virus, investors fear further impact from Covid-19 and prefer cash instead of investments.
All asset classes are seeing downward pressure.
FIIs have also been net sellers to the tune of Rs.40,000 crore this month, further putting pressure on the markets.
However, pockets of value buying in quality stocks were seen during the session.
Vinod Nair, head of research at Geojit Financial ServicesGlobal marketsThe US dollar surged, bonds plunged and Asian markets struggled to find their footing on Thursday as the European Central Banks latest promise of stimulus provided only brief solace while the world struggles to contain the coronavirus pandemic, Reuters reported.MSCIs broadest index of Asia-Pacific shares outside Japan fell 4 per cent to an almost four-year low.European shares rallied at the open after the regions central bank unveiled a massive new bond-buying program and President Christine Lagarde signaled theres no limit to the banks commitment to the euro, Bloomberg reported.The Stoxx Europe 600 Index advanced as much as 1.7 per cent, rebounding from the lowest close since June 2013.