Markets slump for fifth day on coronavirus woes, F&O expiry

Mumbai, Feb 27 (PTI): Equity indices reeled for the fifth straight session on Thursday, pressured by a sell-off in bank, IT and energy counters, as the global markets grappled with fears of the coronavirus outbreak turning into a pandemic.

The expiry of February series derivatives contracts too kept the domestic markets volatile, traders said.

After plunging over 465.69 points during the day, the 30-share BSE Sensex finally settled 143.30 points, or 0.36 per cent, lower at 39,745.66.

Similarly, the broader NSE Nifty fell 45.20 points or 0.39 per cent to end at 11,633.30.

The Sensex has now lost 1,577.34 points in five days, while the Nifty has shed 492.60 points.

ONGC was the top loser in the Sensex pack on Thursday, dropping 2.61 per cent, followed by HCL Tech, M&M, SBI, IndusInd Bank and ICIC Bank.

On the other hand, Sun Pharma, Titan, Axis Bank and Asian Paints climbed up to 3.68 per cent.

World markets extended their losses while safe-haven assets like gold and US Treasuries strengthened after President Donald Trump announced that the US was stepping up its efforts to combat the Covid-19 outbreak, while the number of cases surpassed 81,000.

Indian markets were in the negative territory as the rapid global spread of the coronavirus kept investors on the edge and made them seek safety in gold and bonds, said Narendra Solanki, Head Fundamental Research (Investment Services) – AVP Equity Research, Anand Rathi Shares & Stock Brokers.

India is at risk of getting severely impacted by the epidemic economically because of its high reliance on Chinese imports for various goods, he noted.

Benchmarks also remained volatile on account of monthly expiry of derivatives contracts, he said, adding that sentiment remained sluggish amid reports that GDP growth is likely to stay flat at 4.5 per cent in October-December 2019.

The government’s GDP estimate for the December quarter is scheduled to be released on Friday.

Further, relentless selling by foreign portfolio investors (FPIs) spooked retail investors, traders said.

According to provisional data available with stock exchanges, so far this week, FPIs have offloaded stocks worth a whopping INR 6,812.57 crore on a net basis.

Sectorally, BSE realty, oil and gas, metal, teck, IT, industrials, energy, telecom and auto indices ended up to 2.09 per cent lower, while consumer durables and healthcare settled on a positive note.

Broader BSE midcap and smallcap indices fell up to 0.83 per cent.

Bourses in Seoul and Tokyo ended with significant losses, while Shanghai and Hong Kong closed with gains.

Stock exchanges in Europe plunged up to 1.80 per cent in their morning sessions.

Brent crude oil futures fell 1.33 per cent to USD 52.11 per barrel.

On the currency front, the Indian rupee appreciated marginally to 71.62 per US dollar (intra-day).

European, Tokyo stocks slump as virus takes hold outside China

European and the Tokyo stock markets slumped once again on Thursday as new coronavirus infections surged outside China.

While the markets in Shanghai and Hong Kong both closed higher, Europe was a sea of red with London, Frankfurt, Paris and Italy all down around 2.0 per cent approaching the half-way mark.

Tokyo closed with a loss of 2.1 per cent.

Oil prices also tumbled more than two per cent, while the yen gained as traders turned to a traditional haven in times of economic turbulence.

President Emmanuel Macron on Thursday said France was preparing for a jump in the number of coronavirus cases, adding “we are going to have to deal with it as best we can”.

Visiting staff at a Paris hospital where the first French person carrying the new coronavirus died on Tuesday, Macron added: “We are facing a crisis, an epidemic that is coming.”

President Donald Trump on Wednesday sought to ease concerns, telling reporters that he did not think it “inevitable” that COVID-19 would continue to spread throughout the United States.

Investors are growing increasingly fearful about the economic impact with several big companies including Apple, Microsoft and drinks giant Diageo expecting sales to be hit.

The virus continues to spread meanwhile, with Brazil reporting Latin America’s first case, and Greece, Georgia, Norway and Pakistan following suit.

Shanghai’s stock market nonetheless closed up 0.1 per cent as the virus appeared to be easing in China, while Hong Kong reversed earlier losses to end up 0.3 per cent.

Still, observers warned of worse to come for markets.

“There is still so much more uncertainty around how coronavirus is going to spread, particularly in the US,” said Katie Koch at Goldman Sachs Asset Management.

The panic-selling has seen investors rush into haven investments, with the yield on 10-year and 30-year Treasuries around record lows, while oil is being battered by concerns about plunging demand.

Both main crude contracts are down about one-fifth this year and were sitting at more than 12-month lows Thursday.