Coronavirus Wrecks Havoc on the Indices; Sensex Falls Below 34,000 Points

More than Rs 8 trillion of the investors’ wealth has been eroded in the early trade hours of Thursday as the Indian stock markets crashed. This has been the trend around the world, and the global equity selloff has put immense pressure on the indices. The spread of coronavirus has halted trade activities across the globe.  

The World Health Organisation has termed the coronavirus outbreak as a pandemic. The number of infections has risen in the middle east and Italy. The United States of America President Donal Trump has imposed a travel ban from Europe to the US. It is interesting to see how the markets will react to this development. 

Amid global tensions over coronavirus, the BSE Sensex has dropped 5.2% or 1,864 points. It opened at weak 34,472.50 points. At around 2:30 p.m., it was trading at 33,015 points. This massive fall in the stock market has now eroded close to Rs 8,56,689 crore of the investors’ wealth. The total market capitalisation of the Bombay Stock Exchange at 10:30 a.m. was just Rs 1,28,56,869.10 crore.

Also Read: Indices Witness Steepest Fall in Absolute Terms, Sensex Sheds 1,942 Points

The market capitalisation was Rs 1,37,13,558.72 crore at the end of Wednesday’s trading hours. Apart from the global fall, short infusion of funds from overseas has also had a significant effect on the investor sentiment. On the net basis, foreign institutional investors ended up selling equities of worth nearly Rs 3,515.38 crore on Wednesday. 

On the Bombay Stock Exchange, as many as 1,789 stocks lost, 152 gained while the remaining 57 stayed unchanged. The equity selloff picked up when the World Health Organisation termed the deadly coronavirus a pandemic. It expresses concerns over the spreading infection. 

Brent crude oil future shed more than 5%. It was trading at $34 a barrel when the US President came up with travel restriction. A slowdown and coronavirus outbreak already plagued the world economy has only given new problems.

For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in