Domestic stock market plunged on Thursday, tracking steep losses in other global equity markets. The S&P BSE Sensex, slumped 2,919.26 points or 8.18% at 32,778.14, its lowest closing level since 23 March 2018.
The Nifty 50 index crashed 868.25 points or 8.30% at 9,590.15, its lowest closing level since 30 June 2017.
The selloff was triggered by the World Health Organisation (WHO) declaring the novel coronavirus (COVID-19) as a global pandemic. Following this, the US President Donald Trump announced to ban all travel from Europe to the United States for 30 days, except from the United Kingdom, to contain coronavirus blow. Markets have also been slammed this week by a plunge in oil prices, after oil exporters said they would increase output rather than cutting production.
In the broader market, the BSE Mid-Cap index tumbled 7.84% and the BSE Small-Cap index dropped 8.72%.
The market breadth was extremely weak. On the BSE, 224 shares rose and 2243 shares fell. A total of 106 shares were unchanged.
With today's decline, the Nifty 50 index has fallen 22.85% from its record high of 12,430.50 hit on 20 January 2020.
Incessant foreign fund outflow in the past few sessions also dented sentiment. Foreign portfolio investors (FPIs) offloaded Indian shares worth Rs 3474.71 crore on Wednesday, taking their total sales to Rs 31,455.35 crore in 12 days.
COVID-19 Crisis:
The Indian Government suspended all visas, except those issued for diplomatic, official, UN/international organisations, employment and projects till April 15. The decisions were announced after a group of ministers headed by health minister Harsh Vardhan met to review and take stock of the COVID-19 situation domestically and abroad.
According to a data provided by the Ministry of Health and Family Welfare, the total number of people who tested positive for COVID-19 stands at 73. Of these 56 are Indian nationals and 17 are foreigners.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 6.236% at 17:07 IST compared with 6.125% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.23, compared with its close of 73.68 during the previous trading session.
In the commodities market, Brent crude for May 2020 settlement was down $2.35 at $33.44 a barrel. The contract fell $1.43 or 3.84% to settle at $35.79 a barrel during the previous trading session.
Foreign Markets:
Wall Street is set to extend slump as Dow futures pointed to 1233 point opening drop on Thursday.
Shares in Europe and Asia slumped on Thursday after the United States suspended all travel from Europe in order to contain the coronavirus epidemic that has extracted a heavy human and economic toll worldwide.
Donald Trump, on Wednesday, 11 March 2020, said that the US has slapped a travel restriction from Europe to US for 30 days and the rules is said to come into effect from Friday midnight. The travel ban will affect 26 European countries which are a part of visa-free Schengen area. POTUS further announced that he would ask Congress for legislative action to provide payroll tax relief, as well as other measures for several groups impacted by the virus.
On Thursday, 12 March 2020, European Central Bank is expected to announce its measures to mitigate the economic impact of the coronavirus. Investors across the globe would keenly look forward to the stimulus taken up in the monetary policy meet.
Meanwhile, auto sales in China plunged 79.1% in February, marking their biggest ever monthly decline, as a coronavirus outbreak hit demand, data from the country's largest auto industry association showed on Thursday. Total auto sales in China, the world's biggest auto market, fell to 310,000 units from the same month a year earlier, declining for a twentieth straight month, the China Association of Automobile Manufacturers (CAAM) said.
In US, stocks slumped on Wednesday, with the Dow ending in bear-market territory for the first time in more than a decade, after the World Health Organization designated the global spread of COVID-19 a pandemic, unnerving investors already disappointed with the lack of an economic policy response from the Trump administration.
Buzzing Indian Segments:
The Nifty Metal index slumped 9.38% to 1,800.60, extending losses for sixth day. The index has lost 22.41% in six sessions.
China is the world's top producer and consumer of steel and aluminum. With factories closed and the movement of people and freight restricted to slow the spread of the new coronavirus, China's demand for base metals has plummeted.
SAIL (down 13.76%), Vedanta (down 13.25%), Hindalco Industries (down 13.04%), Hindustan Copper (down 12.99%), NMDC (down 11.06%), Hindustan Zinc (down 10.19%), JSPL (down 9.81%), NALCO (down 9.59%), JSW Steel (down 9.15%) and Tata Steel (down 4.21%) slumped.
Stocks in spotlight:
Index heavyweight Reliance Industries tumbled 7.95% to Rs 1061.60.
Among other index giants, State Bank of India (down 13.23%), ITC (down 11.07%), TCS (down 9.45%), HDFC Bank (down 8.18%), HDFC (down 7.88%), Infosys (down 7.82%), slumped.
Tata Power, however, jumped 6.72% to end at Rs 40.50.
Banco Products (India) surged 11.98% to Rs 94.90, extending gains for second straight session after the company announced robust interim dividend.
The stock jumped 14.48% in two trading sessions from its recent closing low of Rs 82.90 as on Monday, 9 March 2020.
The board of directors of the company at its meeting held on Wednesday (11 March 2020) declared an interim dividend of Rs 20 per equity share for the financial year ending in March 2020. Record date is on 19 March 2020. The announcement was made after market hours on Wednesday.
At the current market price, the stock offers a dividend yield of 21.07% on an interim dividend of Rs 20 per share.
Mahindra & Mahindra slumped 6.35%. M&M signed a share purchase agreement for purchase of additional 34,249 equity shares of M.I.T.R.A. Agro Equipments (Mitra), an associate of the company, from its existing shareholders. The company currently holds 26% (on a fully diluted basis) of the equity share capital of Mitra, and post completion of the above transaction, the Company will hold approximately 39% of the equity share capital of Mitra on a fully diluted basis.
Biocon tumbled 7.62%. The drug maker said the company has won a US court ruling that invalidated a Sanofi patent on the insulin Glargine, removing a key legal hurdle for commercialization of the product Semglee co-developed with Mylan, in the US.
Interglobe Aviation slumped 11.85%. The company issued a notification regarding the impact of Coronavirus on the company. The company said in January and February 2020 it experienced modest impact from the Coronavirus. Subsequently, it cancelled flights to China and Hong Kong and reduced frequency to certain other Southeast Asia markets. This capacity was redeployed in other markets without having a material impact on our revenues However, over the past few days, the company witnessed a 15-20% decline in daily booking. The domestic budget carrier expects quarterly earnings to be materially impacted because of the decline. In addition, the rupee has also depreciated sharply which will have an adverse impact on company's dollar denominated liabilities primarily on account of capitalized operating leases.
SMS Pharmaceuticals lost 14.53%. The company in an exchange filing made after market hours yesterday announced the successful closure of inspection with the receipt of establishment inspection report (EIR) from United States Food and Drug Administration (USFDA) for the inspection conducted at its active pharmaceutical ingredient (API) facility situated at Kandivalasa, Andhra Pradesh during 13-17 January 2020.
KPIT Technologies declined 8.45%. The company on Wednesday (11 March 2020) said it will acquire a majority stake in Vayavya Labs (VL), an embedded software company focused on hardware-software interface tools & methodologies. The proposed acquisition of VL will give KPIT a head start in the field of simulation and embedded software automation, across the focus practices of KPIT. It will also help in creating a differentiated positioning and a definite early mover advantage in newer opportunities in the areas of simulation. The total consideration for 100% stake will not exceed Rs 41.80 crore. Initially 78.47% stake is proposed to be purchased for a consideration of Rs 24.56 crore. The balance 21.53% stake is proposed to be acquired over a period of 2 years.
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