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    Sensex cracks 1,450 points; Rs 4 lakh crore gone in 60 seconds

    Synopsis

    A rout in US stocks overnight has sent shivers down investors’ spine globally.

    Sensex cracks 1,450 points, Nifty below 10,900; YES Bank plunges 10%
    NEW DELHI: When America sneezes, the world catches a cold. This phrase aptly defines today’s carnage on Dalal Street.

    A rout in US stocks overnight has sent shivers down investors’ spine globally.

    In India, where investors were still digesting the news of a withdrawal cap at the fourth-largest lender, YES Bank, the news could not have come at a worse time.

    The US President Donald Trump took note of a possible hit from the coronavirus outbreak on the US economy. This along with a 50-basis points rate cut by the US Fed this week -- which a few analysts said was in a haste, especially ahead of the FOMC’s March 17-18 policy review -- are hinting at deeper concerns brewing over the health of the world’s largest economy.

    At the opening bell, the BSE Sensex cracked 1,459.61 points, or 3.79 per cent, to 37,011. The NSE barometer plunged below the 10,900 mark at one go. Within 60 seconds into the trading, investors in India had lost Rs 4.42 lakh crore of wealth, with the market value of all BSE-listed comapnies faling to Rs 143.17 lakh crore compared with Rs 147.59 lakh crore in the previous session.

    The two indices pared some losses later, but were still down over 3 per cent each.

    At 11.30 am, the BSE Sensex was trading at 37,285.45, down 1,185.16 or 3.08 per cent. Nifty was still ruling below 10,900. Fear gauge India VIX spiked 12.11 per cent to 26.06.

    "Yes Bank Fiasco comes as an out of syllabus question for the market amid ongoing worries over coronavirus," said Santosh Meena, Senior Analyst at Tradingbells.

    It raises a question on the stability of the overall Indian financial system, Meena said.

    YES Bank plunged 14.93 per cent to hit a low of Rs 31.35. Stock exchanges on Friday said there would be no futures and options contracts available on the counter in the derivative segment from May 29 onwards.

    “Any resolution for YES Bank is more proposed from the perspective of deposit holders and systemic stability, and not from the perspective of YES Bank equity investors or even perpetual bond holders,” said Nomura India.

    Placing the bank under moratorium implies that equity value in the bank would be negligible, the brokerage said.

    Other banking stocks also took a hit. IndusInd Bank cracked 11.37 per cent to Rs 952.50. SBI dropped 8.39 per cent to 264.10. Thirty of 30 Sensex stocks were trading in the black

    Tata Steel, Bajaj Finance, UltraTech Cement, L&T and M&M tanked 3-6 per cent.

    Data suggests at least 57 new cases of coronavirus were confirmed in the US on Thursday as the virus struck for the first time in Colorado, Maryland, Tennessee and Texas, as well as the city of San Francisco.

    Investors were also worried about the spread of the virus in India.

    “While the first-order impact on India is contained (virus spread, supply chains, limited exports), its second-derivative effect could be greater: particularly given India is already at a low: growth, risk appetite and policy flexibility. India is getting hit with the virus when its immunity is low,” Edelweiss Securities said.

    A study by SBI Economic Wing suggests that was 99 days that the highest percentage variation for Nifty peak-to-bottom was 15 per cent between January 2015 and February 2020. “It took 59 days to reach there and comparably for a 17 per cent bottom to peak variation was achieved in 158 days. The impact is asynchronous and we believe that the short run impact of virus will be significant for the market,” it said.

    The rupee tumbled to a low of 73.90, the lowest since October 2018.



    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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