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Markets reverse all gains in closing hour; Sensex ends 811 points lower

Nifty falls below 9,000 after dropping 10% in two days

Sundar Sethuraman  |  Mumbai 

Bulls deliver knockout punch after opening-hour shocker
The Sensex finally settled at 30,579, down 811 points, or 2.6 per cent.

Little respite seems to be in sight for the as overseas investors continue to aggressively sell amid fears of a global recession. The benchmark Nifty index on Tuesday ended below the 9,000-mark for the first time in nearly three years, while the Sensex managed to hold on to 30,000. In the last two sessions, the Nifty has dropped nearly 1,000 points, or 10 per cent, while the Sensex has lost 3,500 points, weighed down by an Rs 8,000-crore pullout by foreign portfolio investors (FPIs) in two days.

On Tuesday, it appeared that the would get a breather as the benchmark indices opened sharply higher. In an extremely choppy day of trade, the Sensex climbed as much as 658 points, only to reverse all gains and more in the last hour of trade. At one point, the Sensex was down 996 points over its previous close of 31,390.

The Sensex finally settled at 30,579, down 811 points, or 2.6 per cent. The Nifty, on the other hand, fell 230 points, or 2.5 per cent, to end the session at 8,967, the lowest close since May 2017.

Worries about the coronavirus’s impact on economic growth and corporate earnings have gripped as the death toll and the number of affected people increases with each passing day and countries across the globe announce lockdown to control the damage.

ALSO READ: Market crash: Top 3 IT firms lose $31 bn in a fortnight amid virus scare

The Reserve Bank of India (RBI) has announced currency swap and measures to boost liquidity. However, it has refrained from announcing a rate cut, unlike most of its global peers. Many investors were expecting the central bank to announce an emergency cut.

Coronavirus outbreak makes the prospect of global recession unavoidable

Financial stocks led the declines on Tuesday. Two-thirds of Sensex components ended with losses. ICICI Bank and IndusInd Bank were the worst-performing Sensex stocks falling close to 9 per cent each. Hindustan Unilever and Asian Paints gained over 3 per cent each, cushioning the market fall. Barring one, all sectoral indices of the BSE ended the session in the red. On an overall basis, 1,677 declined, and 751 stocks advanced on the BSE.

The domestic markets are currently down more than 25 per cent from their all-time highs logged in mid-January. Analysts termed Tuesday’s rout as a typical bear market selling.

“Once the markets enter a ‘bear phase’ whenever there is a recovery, those who have suffered losses reduce their positions. While others use bounce to create fresh short positions,” said Chandan Taparia, derivatives and technical analyst at Motilal Oswal. One-month FPI selling has crossed Rs 54,000 crore on Tuesday.

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Source: Exchange

First Published: Wed, March 18 2020. 01:32 IST
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