In a nerve-wracking week for the markets, the BSE Sensex plummeted 3,473.14 points or 9.24 per cent while the NSE Nifty lost 1,034.25 points or 9.41 per cent, largely in tandem with global equities which succumbed to panic selling triggered by the coronavirus outbreak.
Domestic markets witnessed a roller-coaster session on Friday, with trading being halted for the first time in 12 years as benchmarks plunged over 10 per cent in opening trade, before staging a record-shattering comeback.
Analysts said participants would keep an eye on the spread of the coronavirus, as well as further stimulus measures by global central banks and governments. The US Federal Reserve is also scheduled to announce its rate decision this week.
"Markets would take a while to recover from this significant price damage. While volatility may continue in coming days, we could see intermittent relief rallies, however these are likely to be short-lived. In such times of global volatility, retail investors should keep calm and not panic," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.
The number of novel coronavirus cases in the country rose to 107 on Sunday, with 12 fresh cases in Maharashtra, the Union Health Ministry said.
The virus has infected more than 150,000 people worldwide and killed over 5,600.
On the macroeconomic front, WPI inflation data will be announced on Monday.
"Temporary relief was seen in the global markets based on stimulus hopes. Investors are still advised to be alert since the volatility, as measured by the volatility index has reached all-time highs. Sentiments around the spread of the virus will continue to drive the markets and any signs of the rate of infections falling will be a positive," said Vinod Nair, Head of Research, Geojit Financial Services.
"In the near term, we expect volatility to remain high and maintain cautious stance," Ajit Mishra, VP - Research, Religare Broking Ltd said.
According to IndiaNivesh, Head - Institutional Equities, Vinay Pandit, "Markets have seen a lower circuit for the first time after 2008. But equating this situation with 2008 is unfair. 2008 was a global financial meltdown whereas the 2020 correction due to concerns on account of coronavirus are overdone. Good quality stocks have taken an undue beating and I am expecting a sharp bounce back." The Indian benchmarks posted their biggest ever one-day falls in two sessions this week (March 9 and 12).
Investor wealth worth around Rs 15 lakh crore has been wiped off in the past four sessions.