Rise in cases sparks market sell-off, oil surges as Opec flags meet

MUMBAI/LONDON: Indian stock markets continued to see sell-offs amid the surge in covid-19 cases. However, the pace of single-day fall has declined significantly. On Friday, BSE Sensex ended at 27,590.95, down 674.36 points or 2.39%, while the 50-share Nifty fell 170 points or 2.06% to 8,083.80.

Asian markets witnessed mixed response to the covid-19 crisis with China and Australia falling 1-2%. Investors remained concerned over the rise in infections across the world and the potential economic fallout, according to Sanjeev Zarbade, vice-president, PCG Research, Kotak Securities Ltd.

“While the timing of the control of the covid-19 pandemic is uncertain, we find that valuations are entering the value zone. Our advice to investors is that buy companies with a strong balance sheet that are able to ride through these difficult times,” Zarbade said.

This week, the India volatility index, or VIX, has fallen 21.43%, indicating that fear is ebbing. It fell by 7.91% to 55.3 on Friday. VIX had touched levels of 83 towards the end of March, but has since been declining to below 60.

In March, foreign institutional investors sold $16 billion in debt and equity, making it the highest monthly outflow ever.

Meanwhile, the price of crude oil surged again Friday after Opec said it would talk to nonmembers, notably Russia, giving investors hope that they will stop a price war which has created market chaos along with crushed demand because of the virus.

The Saudi-led Opec group of oil producers and their allies will meet Monday via video conference, a source close to the cartel said.

“There’s certainly a lot of optimism that a deal is going to be done,” OANDA analyst Craig Erlam told AFP.

(Agence France Presse contributed to this story).