The coronavirus outbreak has tightened its grip on the financial markets the world over even as governments and central banks are ramping up the efforts to contain the economic fall-out from the crisis. As the number of cases worldwide continue to pile up, with 114 cases in India, investors are getting more and more concerned about the virus' impact on the global growth and the ability of the governments to control it.
In such a scenario, the Wall Street cratered on Monday with the S&P 500 tumbling 12 per cent, its biggest drop since the "Black Monday" three decades ago, despite the US Fed's surprise move late Sunday to cut interest rates to near zero.
Overall, the S&P 500 lost $2.69 trillion in market capitalisation for the day. The Dow Jones also fell nearly 13 per cent and the Nasdaq Composite ended 12.3 per cent down.
After Wall Street's historic rout, most Asian shares also fell on Tuesday. MSCI's broadest index of Asia-Pacific shares outside Japan gave up early gains to trade 0.43 per cent lower, Japan's Nikkei stock index slid 2.79 per cent and South Korea's KOSPI was off 3.2 per cent. Australian shares were up 0.5 per cent although this followed a massive plunge of almost 10 per cent on Monday. The SGX Nifty, though, rebounded to trade nearly 200 points higher after the US stock futures rose following the rout.
Besides, the Reserve Bank of India's decision to leave interest rates unchanged for now will also impact sentiment. In a suddenly announced press conference that had raised hopes for an emergency rate cut, Governor Shaktikanta Das promised whatever it takes approach to fend off the economic crisis caused by lockdowns although the timing of any interest rate action would be based on the "evolving situation", he said.
The RBI also announced a US dollar sell/buy swap on March 23 worth $2 billion and a Long Term Repo Operation in multiple tranches of up to Rs 1 trillion.
In commodities, oil prices fell below $30 a barrel on Monday after the coronavirus outbreak worsened over the weekend, exacerbating fears that government lockdowns to contain the spread of the disease would spark a global recession. Brent crude settled down 11.2 per cent at $30.05 a barrel.
Back home, the S&P BSE Sensex ended Monday's session 2,713 points lower at 31,390 while the Nifty50 index closed with a 758 points cut at 9,197. According to experts, the uncertainty and increasing spread of the virus domestically can lead to further choppiness in the markets in the coming days.
Read by: Kanishka Gupta