Bears ran amok in the first few minutes of trading on Dalal Street on Friday as benchmark indices hit 10% lower circuit, forcing a halt in trading.
BSE flagship Sensex was down 3,091 points to below 30,000 levels. It was stuck at 29,687. NSE barometer Nifty plunged 10.07% to 8,624.
All constituents of Sensex and Nifty were trading deep in the red with HCL Technologies Ltd., Tech Mahindra Ltd. and Kotak Mahindra Bank down as much as 15% each.
“Over the last few days the Indian stock market has been moving in tandem with other global markets owing to concerns relating to Covid-19 pandemic, resultant fear of economic slowdown, recent fall in global crude oil prices, etc,” said a statement from market regulator SEBI.
Here are the key factors drowning the stock market:
A rapidly spreading Covid-19 took the first life in India as a 76-year-old man from Karnataka’s Kalaburgi tested positive for Covid-19. The country has reported a total of 77 corona virus positive cases.
Around more than 4,613 people have died and over 126,000 have been infected globally, according to the World Health Organisation (WHO).
The WHO had declared the new corona virus outbreak a pandemic, sounding alarms in the markets across the world. A pandemic is an epidemic of worldwide proportions, affecting most countries.
Oil headed for worst week in 29 years
On Friday prices of oil fell for a third day, with Brent crude set for its biggest weekly drop since 1991 and US crude heading for the worst week since 2008 as panic about plunging demand from the corona virus outbreak grips the market.
Brent crude was down 47 cents, or 1.4 per cent, at $32.75 a barrel by 0317 GMT after falling more than 7 per cent on Thursday. For the week, Brent is set to fall nearly 28 per cent.
Analysts see the oil price crash as largely negative for India despite it heavily depending on imports.
Viktor Shvets of Macquarie is one of the analysts say that India cannot tolerate high oil prices, but neither can India tolerate it when oil prices are too low. He believes that for emerging markets, a lower crude prices means less growth, less reflation, greater pressure in high yield markets and higher spreads.
Foriegn Institutional Investors continue dumping stocks
Foreign Portfolio Investors (FPIs) have dumped domestic shares worth nearly Rs 24,000 crore in March till now. Foreign Portfolio Investors (FPIs) were sellers of domestic stocks to the tune of Rs 3,475 crore on Thursday, data available with NSE suggested.
Meanwhile, Domestic Institutional Investors have been pouring money to buy shares at cheap rates. They were net buyers to the tune of Rs 3,918 crore, data suggests.
Global shares falling like lawn bowling
Global stock markets crashed ending their long bull run, with corona virus panic selling hitting almost every asset class and leaving investors nowhere to hide. Japanese stocks were in free fall and markets from Seoul to Jakarta punched through down limit circuit breakers.
Trade was halted on the S&P 500 overnight after it hit circuit breakers. It fell further when trade resumed, eventually losing 9.5 per cent to close 27% below February’s peak.