COVID-19 fear: Sensex loses 806 pts, gold hits life-time high - Eastern Mirror
Thursday, March 30, 2023

COVID-19 fear: Sensex loses 806 pts, gold hits life-time high

By EMN Updated: Feb 24, 2020 10:42 pm

Mumbai, Feb. 24 (IANS): Indian stock markets alongside global equities markets tumbled and prices of safe haven assets such as gold logged a record high over fears of further disruption in economic activity owing to the jump in coronavirus-related deaths, particularly outside China.

Growth worries owing to the deadly virus outbreak knocked down the global oil prices by over 3 per cent and caused a sell-off in manufacturing sector stocks.

Nifty metal index crashed 5.36 per cent as investors distanced themselves from companies such as Jindal Steel & Power Limited, JSW Steel Limited, SAIL and Tata Steel Limited.

Meanwhile, gold’s record breaking run continued on Monday as investors sought more and more safe haven assets over increased uncertainty due to soaring coronavirus cases. Gold futures for April delivery topped the INR 43,000 per 10 gm mark for the first time.

“Demand for safe-haven assets spiked as fresh coronavirus cases in South Korea and Italy indicated that business impact could be higher than thought earlier. The Trump-Modi meet is not providing clues to the market regarding trade deals, but the market is hoping for some hints in the future,” said Vinod Nair, Head of Research at Geojit Financial Services.

After the volatility index or the India ‘VIX’ climbed over 25 per cent, the Sensex closed 806.89 points lower at 40,363.23. The broader Nifty settled at 242.25 points lower at 11,838.60. The BSE mid-cap index closed 1.60 per cent lower while the small caps index closed lower by 1.58 per cent.

Risky asset classes such as equities bore the brunt of coronavirus spread outside China. South Korea reported its seventh coronavirus death and 161 new confirmed cases on Monday, bringing the total number to 763.

Italy saw virus cases jumping exponentially from three on Friday morning to more than 150 by Sunday. Italy’s spike now marks the biggest outbreak outside of Asia.

In China, the epicentre of the outbreak, coronavirus-related death jumped past 2,600. The deadly virus has infected more than 77,000 people in China and was described by Chinese President Xi Jinping as the “largest public health emergency since the founding of the country”.

Asian share indexes were a sea of red. Korea’s KOSPI Index slipped nearly 4 per cent, Shanghai Composite Index was down 0.28 per cent. Besides, Australia’s benchmark index slid 2.2 per cent while New Zealand was about 1.3 per cent lower.

“Seoul led a sharp drop across Asian and European equity markets Monday as South Korea announced a surge in COVID-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic,” said Deepak Jasani of HDFC Securities.

By EMN Updated: Feb 24, 2020 10:42:16 pm