Coronavirus wreaks havoc on D-Street, all sectoral indices end at multi-year lows

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D-Street witnessed its biggest-ever crash on March 12 as the deadly coronavirus continues to wreak havoc across global financial markets.

The World Health Organisation’s declaration of coronavirus as a pandemic followed by travel ban by many countries triggered panic selling.

The Sensex crashed 3,204 points intraday, before closing 2,919.26 points down at 32,778.14, the lowest since December 6, 2017.

The Nifty has slumped 1,400 points during the current week so far, including today’s correction of 868.25 points or 8.30 percent to 9,590.15 – the lowest since June 30, 2017.

Indices have registered a fall of more than 22 percent from their record highs seen in January this year.

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“China is getting fully operational while America and European companies are also operational. But despite that, markets are in panic mode,” Ajay Srivastava, Dimensions Corporate Financial Services, told CNBC-TV18.

The trigger of margin calls, leverage clearly disappearing and market panic which all come together and were three main reasons which cracked the markets more than global peers, he added.

The fall was so brutal that all sectoral indices closed in the red and hit multi-year lows, while all Nifty and Sensex stocks also caught in bear trap.

Bank Nifty formed a large bearish candle on daily charts as it witnessed a fall of a whopping 2,516.60 points or 9.50 percent to close at 23,971.20 – the lowest level since March 2018.

Amongst them, shares of State Bank of India witnessed its biggest single day fall of 13.23 percent – the lowest since June 2016.

HDFC Bank closed 8.18 percent down at Rs 1,021.70 – the lowest since January 2019. Among others, IDFC First Bank, Bank of Baroda, Yes Bank, Axis Bank, PNB and Federal Bank were down in the range of 10-17 percent each while ICICI Bank, RBL Bank, Kotak Mahindra Bank and IndusInd Bank fell over 7 percent each.

PSU Bank index hit a record low of 1,420.65, closing 13.16 percent down.

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Nifty Metal index closed at the lowest level since March 2016, down 186.35 points or 9.38 percent to 1,800.60, while the Nifty Auto index touched the low of May 2014 on closing, down 535.05 points or 8.15 percent to 6,033.40.

Nifty IT index saw the lowest closing level since April 2018, down 1,296.55 points or 8.83 percent to 13,384.85, while Nifty Pharma plunged 680.50 points or 8.93 percent to 6,942.55, the lowest level since August 2013.

Nifty FMCG index closed at the lowest level since March 2018, falling 1,995.75 points or 7.11 percent to 26,083.

Ajit Mishra, VP – Research at Religare Broking told Moneycontrol that the market direction would continue to be dictated by Coronavirus update as World Health Organisation (WHO) has declared the virus as a pandemic, creating panic amongst investors.

“Further, crude oil price and currency movement will be on investors’ radar. Hence, we expect volatility to remain high in the markets given uncertainty across the globe,” he said.

India Volatility Index also jumped nearly 12-year high intraday, before closing higher by 30.43 points to 41.16 levels.

The broader markets also saw major selling pressure with Nifty Midcap index declining 1,251.80 points or 8.08 percent to 14,243.05 and the Smallcap down 493 points or 9.55 percent at 4,671. These indices dropped to the lowest level since December and March 2016 respectively.

Among stocks, ONGC (down 12.63 percent) hit a 16-year low, Tata Motors (down 11.11 percent) 11-year low and HDFC (down 7.91 percent) hit nearly one year low.

NCC also closed at 6-year low, BHEL at 17-year low, and Indiabulls Housing Finance at record low.

BSE market capitalisation dropped by Rs 11.26 lakh crore to Rs 125.86 lakh crore today, while investors’ wealth eroded by Rs 32.84 lakh crore from February 20, 2020.

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