Markets pummelled as virus spreads to Italy, Iran

MUMBAI: Indian stocks fell the most in more than three weeks as investors were spooked by a sharp rise in new coronavirus infections and deaths in countries such as Italy and Iran and as experts warned of an impending pandemic.

The market appeared to stabilise after opening lower, but selling intensified as the day progressed, with the benchmark BSE Sensex tumbling 806.89 points, or 1.96%. It was the sharpest drop since a 2.43% decline on 1 February.

Equity investors became poorer by ₹3.18 lakh crore as total market value of BSE-listed firms declined to ₹155.33 lakh crore from ₹158.51 lakh crore as of February 20.

Investors also seemed to overlook US President Donald Trump’s maiden visit to India and some of the deals expected to be announced during his trip.

Heavy selling was seen across the board, with metals, auto and pharma some of the hardest-hit sectors. Investors are worried that metal prices will weaken amid a slump in demand in China, one of the world’s top consumers.

Concerns that a wider slowdown in the global economy could crimp demand for goods such as automobiles, and the impact of the fast-spreading coronavirus epidemic on the supply chain network of pharmaceutical firms hit investor sentiment.

“The growing influence of coronavirus fuelled a stock-market rout across global markets, including India,” said Shrikant Chouhan, senior vice president of equity technical research at Kotak Securities.

Risks to global growth and demand for commodities have heightened after the coronavirus epidemic, which has seen 79,440 people infected, while 2,624 have died worldwide. The rate of infection has fallen in China, but risen outside the country, causing turmoil in financial markets.

“The Nifty is on its way down to test its long-term average of 11,682. All near-term oscillators are in sell mode,” said Arun Kumar, market strategist at Reliance Securities.

“We expect the weak trend to prevail in the near term. Investors are advised to stay on the sidelines and wait and watch. We expect the market to fall below its long-term average towards 11,400 by end-March or early April. Thereafter, one can look for some bottom-fishing at those levels.”

Oil markets tumbled, with Brent crude slipping 4.09% to $56.11 a barrel. The rupee also weakened 0.48% to close at 72 to a dollar, while the benchmark 10-year benchmark G-sec declined by 9 basis points to close at 6.33%.

THE BSE SENSEX FELL 807 PTS, ITS SHARPEST FALL SINCE FEB 1, WHILE EQUITY INVESTORS LOST ABOUT ₹3.18 LAKH CR